Report: Costs For Medical Plans To Increase By Less Than Expected

A new report from Buck Consultants finds that costs for medical plans are expected to increase by less than 10 percent for the first time since 2001, raising 9.9 percent in 2012. The group is attributing the trend to lower-than expected utilization as a result of the economic slowdown. “The reduced trend factors reported in our survey reflect that health insurers, who may have previously added margins to account for health care reform benefit changes mandated for 2011, have now removed those margins for 2012 projections,” said Daniel Levin, FSA, a Buck principal and consulting actuary who directed the survey. “The reduction also reflects lower expected costs as a result of the economic slowdown. Employees are trying to reduce their out-of-pocket expenses and are postponing elective medical services.” He notes however, that reform must do more to reduce the growth rate: “Despite the lower trend factors found in our survey, health care costs continue to outpace both general inflation and wage increases — creating real business challenges for organizations,” said Levin. “We’ve seen increased interest from plan sponsors for strategies to optimize alternative delivery systems such as exchange models and Accountable Care Organizations.” A table of the growth: