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Segal: Plan Cost Increases Converge

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Sponsors of preferred provider organization plans, point-of-service plans and health maintenance organization plans are expecting to see similar cost increases in 2008.

Forecasters at the Segal Group Inc., New York, say underlying care costs for PPO coverage without prescription benefits will increase 10.7% in the coming year, while costs for POS plans without drug benefits will increase 10.6%, and costs for HMO plans without drug benefits will increase 10.5%.

Segal bases its cost trend forecasts on an informal survey of payers and benefit plan administrators.

The rate of cost increases for drug plans has fallen to about 10.7%, down from a high of 19.5% in 2003, the Segal forecasters report.

The forecasters see price inflation accounting for about 60% of the overall projected PPO trend in 2008, the forecasters report.