Declines predicted for health care trends for sixth consecutive year.

• Author: Heffes, Ellen M.
• Position: HEALTH CARE - Survey

Marking the sixth consecutive year of declines, the 2009 Segal Health Plan Cost Trend Survey forecasts another drop next year. The survey defines "trend" as the projected change in health plans' per-capita claims cost determined by insurance carriers, managed care organizations, pharmacy benefit managers and third-party administrators.

Segal forecasts that most trend rates will be lower in 2009 than in 2008, but cost trends for all medical plan types are higher than inflation. Key findings of the survey include:

* Projected trend rates for point-of-service (POS) medical plans (without prescription drugs) for actives and retirees under age 65 have declined from a high of 13.7 percent in 2003 to 10.4 percent in 2009.

* Projected retail prescription drug trends continue to decline, and have fallen from a high of 19.7 percent in 2001 for active employees to 9.8 percent in 2009. For retirees, the retail prescription trend has fallen to 9.1 percent in 2009. (This is the first time since the survey's inception that prescription drug trends are in single digits.)

* Trend rates for hospital services are projected to be 10.9 percent in 2009, exceeding trends for physician services and prescription drug supplies.

* Projected medical plan trend rates for retirees age 65 and older are expected to be measurably lower than the medical plan trend rates projected for active participants and early retirees.

* Combined preferred provider organization (PPO) and POS plan projected trend rates show variation among regions. Midwest trends are projected to be 9.4 percent, compared with 10...