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Buck: Employers Still Expect Big Health Cost Increases

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A large benefits consulting firm says it sees signs that double-digit increases in health care costs are continuing to threaten employers.

Researchers in the San Francisco office of Buck Consultants L.L.C. surveyed 83 insurers and benefits administrators for “medical trend information,” or health cost information, for the first half of 2006.

The researchers found that the rate of increase for preferred provider organizations may fall to 12.7%, from 13.4% for the first half of 2005, and that the rate of increase for pharmacy benefits may fall to 11.1%, from 14.7%.

The rate of increase for high-deductible health insurance plans, which are often used with health savings accounts, fell to 12.3%, from 14.2%.

Although the price increases are cooling down a little bit, they still exceed 10%, the Buck researchers note.

Medical trend figures reflect the cost of medical services and utilization levels, the Buck researchers write.

Changes in actual health coverage rates may be different from the medical trend rates, because health carriers may consider many other factors, such administrative costs and margins for conservatism, when setting the actual rates, the Buck researchers write.


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