Segal Survey Forecasts Declines in Health Plan Cost Trends

August 21, 2008 (PLANSPONSOR.com) - The 2009 Segal Health Plan Cost Trend Survey forecasts continued declines in trends for 2009, marking the sixth consecutive year of declining trends.

However, cost trends for all medical plan types remain higher than inflation.

Projected trend rates for point-of-service (POS) and Preferred Provider Organization (PPO) medical plans (without prescription drugs) for actives and retirees under age 65 have declined from a high of 13.7% for 2003 to 10.4% for 2009, according to the survey report. Trend rates for Health Maintenance Organizations (HMOs) are 10.0% – down from 10.7% in 2008, and for high deductible health plans, 10.8% – down from 10.9% in 2008.

Projected retail prescription drug trends continue to decline, and have fallen from a high of 19.7% in 2001 for active employees to 9.8% for 2009. For retirees, retail Rx trend has fallen to 9.1% in 2009, from 10.1% in 2008. “For the first time since the survey’s inception, prescription drug trend assumptions are projected to hit single digits and drop below medical plan trends,” Segal said in its survey report.

Trend rates for hospital services are projected to be 10.9% in 2009, exceeding trends for physician services and prescription drug supplies.

For most dental plan types, trends for 2009 are forecast to rise slightly from 2008 levels. Fee-for-service/indemnity dental plans are projected to have the highest trend increase at 6.9%.

The average reported projected trend rate for scheduled vision plans remains almost unchanged from 2008 at 3.6%.

The Segal report is here .

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