Health Benefits Cost Trends Decrease In 2015, But Prescription Drug Costs Rise: Segal

Health benefit plan cost trend rates for 2015 are forecast to drop slightly for most health coverage, but to increase substantially for prescription drug coverage, according to the 2015 Segal Health Plan Cost Trend Survey. This is Segal’s eighteenth annual survey of managed care organizations, health insurers, pharmacy benefit managers and third-party administrators to gauge health care cost trends.

Segal projects that the cost trend rate for PPOs will increase 7.5 percent in 2015 (down from 8.4 percent in 2014), and the cost trend rate for HMOs will increase 6.2 percent (down from 7.2 percent). For high-deductible health plans, the projected cost trend is projected to be 7.9 percent in 2015, down from 8.3 percent in 2014.

However, Segal found that higher trend rates are projected for all prescription drug benefit plan types. The trend for carve-out coverage is projected to jump from 6.3 percent in 2014 to 8.6 percent in 2015. The carve-out trend for retirees 65 and older is projected to rise from 5.7 percent in 2014 to 7.5 percent in 2015, more than twice the rate of retiree medical cost trends.

“New specialty drugs coming onto the market and price increases for brand-name drugs are the main forces driving prescription drug plan cost trends,” said Edward Kaplan, Segal’s national health practice leader. “Typically, less than 1 percent of all prescriptions are specialty drug medications, yet these drugs now account for more than 25 percent of total prescription drug cost trends. The projected specialty drug/biotech trend rate for 2015 is an exceptionally high 19.4 percent.”

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