A new survey suggests healthcare costs for all types of employer-sponsored medical plans will increase an average of 9.9 percent this year.
The National Health Care Trend Survey, annual since 1999, has not projected an increase below 10 percent since 2001, according to the Society for Human Resource Management. This is true for both the overall average and for each type of plan. This year, on the other hand, estimates suggests less than 10 percent growth in costs for preferred provider organization, point-of-service, health maintenance organization and high deductible health plans.
Last year, increases for each were all predicted to be 11 percent or higher. Researchers noted that projections for different types of plans do not vary as they have in the past.
"The reduced trend factors reported in our survey reflect that health insurers, who may have previously added margins to account for health care reform benefit changes mandated for 2011, have now removed those margins for 2012 projections," said Daniel Levin, the consulting actuary who directed the survey. "The reduction also reflects lower expected costs as a result of the economic slowdown. Employees are trying to reduce their out-of-pocket expenses and are postponing elective medical services."
Employee benefit cost increases remain a major concern for companies, as growing expenses continue to outpace general inflation and wage increases. As a result, plan sponsors are investigating exchange models, accountable care organizations and other delivery systems in search of a better alternative to current methods of employee benefit plan administration.
Researchers also found that health insurers expect a cost increase of about 9.6 percent for prescription drug plans, more than 1 percent slower than last year's projected growth. Plans supplementing Medicare, unlike the others, saw the rate of expense increase rising to 5.8 percent, compared to 5.3 percent in 2011. This excludes prescription drug coverage.
While this research indicates that Medicare costs are growing more slowly than those of employer-sponsored plans, a study by the Kaiser Family Foundation determined that Medicare benefits are less generous than comparable large employer plans, although the difference in value calculated was 7 percent or less. The program's benefits are relatively generous for low-cost individuals, but private plans would provide more benefits for most mid- and high-cost participants.
