Compared to excessive spikes seen in health-plan premiums in the years gone by, the rate increases predicted for 2016 are said to remain reasonable for many of the medical plan options. However, these hikes will still outpace the overall inflation represented by the CPI (Consumer Price Index).
Costs are predicted to substantially increase for coverage related to prescription drugs and are said to hit the double-digit rates. This information has been forecast on recent surveys conducted on health costs.
A survey report that was released in the month of September this year from Segal Health Plan Cost Trend Survey, that captured important data from big U.S group-health plans on specific cost projections before any of plans for design changes were made. This survey scrutinized the projected “medical cost trends” for 2016 that was reported by some of the major types of health insurance enterprises.
According to the Segal Health Plan Cost Trend Survey, price inflation’s related to brand-name medications and hospital services were the main drivers related to cost increases. One of the most important cost increases is the trend rates associated with coverage for specific prescription drugs that will increase immensely in the year 2016.
Projections for carve-out coverage for employees and active retirees that fall under the age of 65 are at around 11.3%, and retirees that are over the age of 65 are expected to increase to 10.9%. This is approximately 3% higher than the 2015 projections. The specialty drug or biotech cost trends are predicted to stay at a particularly high rate of around 18.9%. However, this projection is somewhat lower than the 2015 projection.
The utilization rates which includes hospital admissions, prescriptions dispensed and medical treatments has been said to decrease by around 1 or 2 percent and play a very small role in the cost increases.
Providing Greater Value
However, in the hope of the more favorable health-plan increases in costs, the costs related to employees in the industry are said to be more controlled when in comparison to the previous years that experienced larger rate increases.
Many corporate plans in the past two years have made numerous cost-shifting decisions. However, it was around 10 years prior that the largest shift took place. The last few years have not seen or experienced major types of wholesale changes like replacing the available employer-provided plans with a higher type of deductible plan.
Even though employers are now adding in options that include higher-deductible plans to encourage cost-conscious decisions on spending as well as holding down premiums. The deductibles will probably experience an increase, but many employers have set forth to offset this with a contribution to HSAs (Health Saving Accounts).
In general, HSA contributions have been holding steady. This is due to the current claims experience that has stayed favorable for the main portion of high-deductible plans. This is evidence that this action is assisting in holding down unnecessary medical expenditure.
2016 Cost Increase Related To Plan Changes
Earlier responses that were released in the month of September 2015 from a Mercer survey predict that the costs for health benefits for each employee will increase around 4.2% in 2016 after they have made the planned changes, like switching carriers or raising deductibles. Over 1,200 employers were said to have responded to this Mercer National Survey Of Employer-Sponsored Health Plans. In addition, the average related to a health benefit costs for employees is forecast not to increase by more than 5%.
What is encouraging as well as surprising is the decrease in underlying cost growths and the expansion employers will be expecting if they decided not to make any changes to existing medical plans.