Reports and Surveys | September 14, 2023
The rapid impact of COVID on the health system has appeared to level off — for the time being. This may explain why the 2024 Segal Health Plan Cost Trend Survey found the rate of medical plan cost increases for 2024 are forecast to be substantially similar to current levels, suggesting cost increases may have reached a plateau.
However, the projected annual cost trend for outpatient prescription drugs is expected to be approaching almost 10 percent, the highest rate of all health benefit cost trend estimates.
For 27 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 2023, 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.
Health plan cost trend is the measure of increases in allowed per capita claims cost. Allowed per capita claims cost is eligible billed charges (before participant cost sharing) less provider discounts.
Although there is usually a high correlation between a trend rate and the actual cost increase assessed by a carrier, trend and the net annual change in plan costs are not the same. A plan sponsor’s costs can be significantly different from projected claims cost trends.
In addition to the high projected prescription drug trend noted above, key survey findings about the coming year’s trend projections include:
In addition to presenting trend projections and trend drivers, the 37-page report:
We recommend a balanced, three-pronged approach to effective healthcare cost management. It involves managing plan design/networks, vendors and population health. Data analytics are central to supporting each of those cost-management strategies.
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.