The fourth National Health Care Trend Survey surveyed more than 80 insurers nationwide to determine projected annual health care plan rate increases for the remainder of 2000 and early 2001.

“Insurers cited everything from increased inpatient costs and higher physician reimbursements to underwriting losses as reasons for raising their trend factors,” said Harvey Sobel, FSA, a Buck principal and consulting actuary and survey co-author.

Plan Types

Overall medical trends were up about 1-2% from the findings in Buck’s last survey (released in January 2000) for the following:

• Indemnity 13.7% (up 1.3% from 12.4% in the last survey)
• Preferred Provider Organization  – 11.2% (up 1.1% from 10.1% in the prior survey)
• Point-of-service  – 9.9% (up 1.5% from the prior 8.4% reading)
• HMO – 8.6% (up 0.9% from 7.7%)
• Prescription drug card – 19.0% (up 1.7% from the 17.3% finding of the last survey)

The 19.0% trend factor between surveys for prescription drug cards is at an all-time high. 

“Insurers have raised their prescription drug trends every six months since Buck began this survey 18 months ago,” according to Brian Stitzel, a Buck senior actuarial manager and survey co-author.

After two years of losses due to inflation and higher utilization, insurers are being extremely cautious.”

A possible silver lining for employers is that pharmacy benefit managers are projecting “only” an 18% rate of increase – slightly lower than the 21% projected by health insurers and HMOs. 

Buck notes that pharmacy managers have either no, or limited, underwriting risk. 

Some employers may save money by self-funding their drug benefits.