Health Care Costs Continue to Fall, Albeit Slowly
The Buck survey, which also reported trends for dental and vision plans, found costs are projected to increase at rates lower than prior surveys.Projected cost increases for all types of medical plans are anticipated to continue the slow, steady declines experienced since 2010 by falling between 0.1 and 0.5 percent in 2014, according to a survey by Xerox subsidiary Buck Consultants. Health insurers reported an average prescription drug trend of 9.2 percent, a decrease of 0.7 percent from the prior survey. Meanwhile, pharmacy benefit managers, which the report noted do not generally take any underwriting risk, reported a weighted average trend factor of 4.1 percent, which is less than half of the factor reported by health insurers, but still up by 0.3 percent from the 3.8 percent reported in the prior survey. Overall, the survey, which also reported trend factors for dental and vision plans, found costs for Preferred Provider Organization (PPO), Point of Service (POS), High Deductible Health Plans (HDHPs) and Health Maintenance Organizations (HMOs) are projected to increase at rates that are lower than its recent prior surveys.
"This may be a result of the economic slowdown and its impact on consumers’ willingness to seek medical treatment," Harvey Sobel, FSA, a Buck principal and consulting actuary who co-authored the survey, said in a statement. "Even though the decline is good news, most plan sponsors still find 8-9 percent cost increases unsustainable."