New York (10/2/14) — Health benefit plan cost trend rates for 2015 are forecast to drop slightly for some coverages, but increase substantially for prescription drug plans, according to data compiled in the 2015 Segal Health Plan Cost Trend Survey, Segal’s 18th annual survey of health plan cost trends.
“New specialty drugs coming onto the market and price increases for brand-name drugs are the main forces driving prescription drug plan cost trends,” said Edward Kaplan, Segal’s National Health Practice Leader. “Typically, less than one percent of all prescriptions are specialty drug medications, yet these drugs now account for more than 25 percent of total prescription drug cost trends. The projected specialty drug/biotech trend rate for 2015 is an exceptionally high 19.4 percent.”
“As has been the case in the past, forecasts are generally higher than actual experience, as insurers and analysts typically add margin to estimates to cover claim volatility,” added Kaplan. “In 2013, actual trends for managed care plans were the lowest reported in more than 12 years.”
As the health benefits landscape continues to change, Mr. Kaplan says, “Sponsors of large group plans must stay focused on exploring health plan strategies that produce high value medical benefits with stable cost trends. This will help avoid future excise taxes.”
The report also studied the expected impact of compliance with the ACA out-of-pocket maximum requirement for 2012, which applies to non-grandfathered plans. The requirement is expected to increase costs by an average of one percent for medical plans and 1.5 percent for prescription drug carve-out plans.
The survey includes data from managed care organizations (MCOs), health insurers, pharmacy benefit managers (PBMs) and third-party administrators (TPAs). Complete survey results are available here.
In addition to compiling forecasted trend rates, the survey examines the accuracy of 2013 projections – and an online supplement to the report features a graph that shows selected actual and projected trend data from 2000-2013 and another graph of selected medical trends for actives and retirees under age 65. These graphs can be viewed here.
Trend is the forecast of annual gross per capita claims cost increases. More information can be found on the report’s online supplement linked above.
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The Segal Group (www.segalgroup.net) is a private, employee-owned consulting firm headquartered in New York and with nearly 1,000 employees throughout the U.S. and Canada. Members of The Segal Group include: Segal Consulting, Sibson Consulting, Segal Select Insurance Services, Inc., and Segal Rogerscasey. In 2014, The Segal Group is celebrating the 75th anniversary of its founding by Martin E. Segal.