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The cost trend for carve-out Rx coverage is projected to jump to 8.6% in 2015
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The rate of annual premium increases for health benefit plans in 2015 is forecast to decrease slightly for some coverages but increase substantially for prescription drug plans, according to data compiled in the 2015
Segal Health Plan Cost Trend Survey, based on the consultancy’s annual survey of health insurers, pharmacy benefit managers and third-party administrators.
The “cost trend” is the forecast of annual gross per capita claims cost increases.
Key survey findings include:
To better control pharmacy benefit costs, many employers separate or carve out their prescription drug benefit from their major medical plan and contract directly with a pharmacy benefit manager. The survey shows that:
Segal's infographic showing variations in 2015 cost trends for health and pharmacy benefit plans can be
Specialty Drugs Driving Up Rates
“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, in a statement accompanying the survey report. “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.”
“As has been the case in the past, forecasts are generally higher than actual experience, as insurers and analysts typically add margin to estimates to cover claim volatility,” cautioned Kaplan. “In 2013, actual trends for managed care plans were the lowest reported in more than 12 years.”
As the health benefits landscape continues to change,“Sponsors of large group plans must stay focused on exploring health plan strategies that produce high value medical benefits with stable cost trends. This will help avoid future
excise taxes,” Kaplan noted.
ACA Out-of-Pocket Requirement
The survey also studied the expected impact of compliance with the Affordable Care Act out-of-pocket maximum limit, which applies to
nongrandfathered plans. This requirement is expected to increase costs by an average of 1 percent for medical plans and 1.5 percent for prescription drug carve-out plans.
Curtailing Rate Hikes
To limit the impact of medical and drug premium increases, Kaplan recommended that employers take several steps. For medical plans:
For prescription drug plans:
Stephen Miller, CEBS, is an online editor/manager for SHRM. Follow him on Twitter
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