Reports and Surveys | October 14, 2021
Looking for the 2023 Segal Health Plan Cost Trend Survey? Get it here.
COVID-19 caused an unexpected disruption in our healthcare system. Utilization was at historic lows as people chose to postpone and even eliminate care. In contrast, use of digital health services exploded in 2020 and changed the way millions of people received their healthcare services. The COVID-19 pandemic also influenced patterns of emergency room, urgent care and retail clinic use that may outlast the pandemic.
For 25 years, Segal has conducted an annual survey of health plan cost trends to give plan sponsors information they need to help make decisions. During the summer of 2021, we surveyed managed care organizations, health insurers, PBMs and TPAs. Collectively, the survey respondents represent more than 80 percent of the commercially insured and self-insured market.
The 2022 Segal Health Plan Cost Trend Survey found projected medical plan cost increases for 2022 are similar to pre-pandemic increases.
Other key findings about 2022 trend projections include:
In addition to presenting trend projections, we evaluated actual historic trends. For the first time in the 25 years that Segal has conducted this survey, actual 2020 trends were negative for medical and dental due to deferred and eliminated care.
What did we find when we compared 2021 and 2022 trend projections?
See how price inflation and utilization affect trend projections for services and prescriptions:
Plan sponsors may wish to consider these strategies as part of their medical cost management for 2022 and beyond:
Effective options for managing pharmacy benefit costs include:
Plan sponsors continue to implement various cost-management strategies to help mitigate increasing health plan costs while maintaining high-quality standards and access to healthcare goods and services. We asked survey participants to rank the top strategies group health plans are using in 2021.
Here's what we found:
The pandemic added significant uncertainties in plan cost projections and forecasters did not anticipate the magnitude of impact for 2020. Before the pandemic, managed care organizations, health insurers, PBMs and TPAs predicted positive plan cost trends for 2020, but actual trends came in negative for most plans.
For the first time, medical and dental trends were negative due to deferred or cancelled care.
For prescription drugs, however, actual trends were not negative. Drivers of those trends were high-cost specialty drugs, drug price inflation and increased utilization of both mail-order pharmacies and drugs to treat behavioral health conditions.
Several uncertainties and risks persist as we near the end of the second year of the global pandemic. Even with the protections of vaccines that reduce the likelihood of hospitalizations and mortality, the Delta variant is creating new concerns and economic burdens. COVID-19 can result in prolonged illness and persistent symptoms, but much is still unknown about its long-term effects.
There are also challenges in responding to the pandemic-triggered behavioral health crises, including increases in mental health-related ailments, alcohol and controlled substance abuse and domestic violence.
Plan sponsors are also dealing with issues related to vaccines, incentives to increase workforce vaccination rates, return-to-work strategies and greater variation in paid claim amounts from month to month and quarter to quarter. These added variables create increased challenges for accurate forecasting of health benefit expenses for many plan sponsors.
Tracking claim-cost expenses more frequently and studying detailed utilization patterns can help plan sponsors effectively respond to increased plan cost volatility that may continue into 2022.
This page is for informational purposes only and does not constitute legal, tax or investment advice. You are encouraged to discuss the issues raised here with your legal, tax and other advisors before determining how the issues apply to your specific situations.