February 5, 2014

Health Benefit Plan Cost Trend Data Shows Slowest Growth Rate in 14 Years

Health benefit plan projected cost trend data has declined steadily and is now growing at the slowest rate in 14 years, according to Segal’s Health Trends Survey.

“Although it remains to be seen if the deceleration of projected trend data is influenced by short-term economic forces, the influence of the Affordable Care Act, improved efforts around life style changes such as weight loss and smoking cessation, early detection of disease  or some factor not yet identified, there continue to be changes in the system that could have long term implications for health care costs,” said Ed Kaplan, Segal senior vice president and national health practice leader. The changes Mr. Kaplan mentions include:

  • Provider reimbursement arrangements are beginning to shift from the fee-for-service model to alternative payment models, such as bundled payments.
  • Participants are becoming more educated consumers.
  • Costs are becoming more transparent.

Mr. Kaplan also noted that while the overall trends continue to decelerate, overall health plan costs are still on the rise. Faced with this reality, plan sponsors are becoming increasingly more progressive and creative in their efforts to manage costs while delivering high quality, cost-effective healthcare. “Plan sponsors must be ready to implement new requirements introduced by the ACA, and will need to play an active role to continue to get the most for their benefit dollars,” he said.

You can click here to view the data.

For more information or to speak to Ed Kaplan, please contact Todd Kohlhepp.

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Segal Consulting (www.segalco.com), a member of The Segal Group, is a leading, independent firm of benefit, compensation and human resources consultants. In 2014, The Segal Group is celebrating the 75th anniversary of its founding by Martin E. Segal. Segal is headquartered in New York and has nearly 1,000 employees throughout the U.S. and in Canada. Clients include corporations, non-profit organizations, professional service firms, state and local governments and joint boards of trustees administering pension and health and welfare plans under the Taft-Hartley Act.

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Edward A. Kaplan

Edward A. Kaplan

SVP, National Health Practice Leader