1999 Segal Health Plan Cost Trend Survey, "1999 Medical and Dental Health Care Costs Projected to Increase Moderately; More Dramatic Increase Expected for Prescription Drugs" (Published in 1999)
The 1999 Segal Health Plan Cost Trend Survey predicts that higher cost increases will affect medical, dental and especially prescription drug plans nationwide in 1999. Medical and dental health plan trends will show a moderate range of cost increases, varying by plan type. In particular, projected 1999 trend for non-network fee-for-service plans and preferred provider organizations (PPO) is expected to be similar to that of 1998, at 12.0 percent and 9.4 percent, respectively; point-of-service (POS) plans and health maintenance organizations (HMOs) are both projected to increase by 2 percentage points over 1998 projected trend, to 7.8 percent and 6.8 percent respectively. Projected dental trend is expected to hold relatively steady at 4.0 percent for prepaid network plans and decrease slightly to 8.3 percent for non-network indemnity plans.
More dramatic increases are expected for prescription drugs. Retail prescription drug trend is expected to increase 4 percentage points over the 1998 projection, to 16.6 percent in 1999, and mail order prescription drug trend is expected to increase by 2 percentage points to 15.0 percent in 1999.
The Segal Company also found that 1998 projected trends, which were reported in last year's survey, were understated for managed care programs and overstated for traditional fee-for-service programs compared to actual rates delivered during the year. The discrepancies between actual increases and projections, as well as the upswing in trends, suggest that insurance carriers', managed care organizations' (MCOs) and third party administrators' (TPAs) ability to contain the level of future cost increases is unknown.
The Segal Health Plan Cost Trend Survey focuses on claim cost trend, and not the net change in costs to plan sponsors, to present an undistorted forecast of future health benefit costs. Trend is the average expected change in health plans' per-capita claims cost determined by individual insurance carriers, MCOs and TPAs.