Get access to the exclusive HR Resources you need to succeed in 2018!
Training, policies and tools to help HR prevent and respond to harassment claims.
Is your employee handbook keeping up with the changing world of work? With SHRM's Employee Handbook Builder get peace of mind that your handbook is up-to-date.
Develop your HR competencies and knowledge in-person in 12 U.S. cities or virtually.
#SHRM18 will expand your perspective – on your organization, on your career, and on the way you approach HR. Join us in Chicago June 17-20, 2018
Health care plan costs are projected to rise more slowly in 2014 than in previous years, according to a survey by Buck Consultants. This continues the favorable trend of declining rate hikes since 2010, although health plan costs still outpace inflation and wage growth.
In a national survey of 126 insurers and administrators, Buck measured the projected average annual increase in employer-provided health benefit costs. Insurers and administrators providing medical cost trend data for the survey cover a total of approximately 119 million people.
In its 2014
National Health Care Trend Survey, Buck found costs are projected to increase at rates that are lower than its recent prior surveys, as shown in the following chart.
Type of Plan
Annual Health Care Cost Increase
provider organization (PPO)
Point-of-service (POS) plan
maintenance organization (HMO)
High-deductible healthplan (HDHP)
Source: Buck Consultants.
Some survey respondents cited reduced use of health services as the primary reason for the decrease.
“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 who co-authored the survey. “Even though the decline is good news, most plan sponsors still find 8-9 percent cost increases unsustainable.”
Health insurers project an average prescription drug cost increase trend of 9.2 percent in 2014, down 0.7 percent from the prior year’s survey.
“It’s too soon to tell the impact of
public and private health exchanges on [the cost increase] trend,” said Daniel Levin, a Buck principal and survey co-author. “It may take another few years before we really know if (and by how much) the exchanges will ‘bend’ the cost curve.”
In general, cost trend projections reflect price increases that may result from inflation, use of services, technology, changes in the mix of services, and mandated benefits. Health insurers use cost trends to calculate premium rates, and large self-funded employers use these trend factors to budget their future health care costs.
(click on graph to view larger version)
CEBS, is an online editor/manager for SHRM. Follow him on Twitter
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Your session has expired. Please log in again before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
Choose from dozens of free webcasts on the most timely HR topics.
SHRM’s HR Vendor Directory contains over 3,200 companies