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May 16, 2014 at 07:19 AM
The rate of employer-provided health care plan costs is either going up or down this year, depending on who you talk to.
Either way, the difference won’t be much. And overall, the news is good: cost hikes are fairly stable.
Towers Watson and Buck Consultants this week each released their own projections for employer health care spending for 2014. Towers Watson surveyed 173 medical carriers from around the globe; Buck got input from 126 carriers and administrators.
Want good news? Look to the Buck survey. It says the rate of increases in all types of health plans will be less in 2014 than in either of the two prior years.
Costs for PPO plans, it said, rose 8.7 percent this year, lower than last year’s 9 percent growth and the 9.2 percent seen in 2012. HDHPs show the biggest decline in cost increases, rising 8.6 percent this year compared to 9.1 percent in 2014. HMO and POS plans fell as well. For plans that supplement Medicare, though, the health-cost hike spiked to 5.5 percent from 4.1 percent last year.
The average prescription-drug cost increase for this year is 9.2 percent, down from 9.9 percent a year ago.
Buck said reduced utilization was cited by some as the primary reason for the decreases.
“This may be a result of the economic slowdown and its impact on consumers’ willingness to seek medical treatment,” said Harvey Sobel, a Buck principal and consulting actuary who co-authored the survey. “Even though the decline is good news, most plan sponsors still find 8 to 9 percent cost increases unsustainable.”
