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Segal: Health Costs To Rise 10%

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Sponsors of group health plans for active employees are expecting to see the underlying medical claims costs go up about 10% to 11% in 2009.

Forecasters at the Segal Group Inc., New York, are basing that conclusion on results from responses to a cost trend survey that included about 70 health carriers and plan administrators.

The projected trend increases for medical coverage, excluding prescription coverage, are 10% for health maintenance organization plans, and about 11% for preferred provider organization plans without gatekeepers and high-deductible health plans, Segal consultants write.

The consultants included all plans with high deductibles in the HDHP category, whether or not the plan sponsors offer health savings accounts or health reimbursement arrangements.

This year, survey participants say, costs appear to be on track to rise about 11% for HMOs, open-access PPOs and HDHPs, the consultants write.

In 2007, actual cost increases were lower than Segal survey participants had predicted.

The predicted 2007 increases were 11% for HMOs, and 12% for open-access PPOs and HDHPs.

The actual 2007 increases were 9.8% for HMOs, 8.9% for open-access PPOs and 9.5% for HDHPs.

The Segal consultants note that coverage cost increases often differ from the medical cost trends as a result of changes in plan design, changes in plan member demographics and other factors.