The average annual costs for all types of health plans are expected to increase by 9.9% in 2012, according to a new survey by Buck Consultants, the Sacramento Business Journal reports. The projection marks the first time since 2001 that Buck has estimated rate hikes of less than 10% for any plan.
The consultancy firm surveyed 129 U.S. insurers and administrators that provide health benefits for 109 million residents.
Key Findings
According to the survey, most rate hikes are expected to decrease by a percentage point since last year.
Buck also projected that:
- HMO rates will increase by 9.9% in 2012, down from 11% in 2011;
- PPO rates will increase by 9.9% in 2012, down from 11.2% in 2011;
- Point of service rates will increase by 9.9%, down from 11% in 2011; and
- High deductible health plan rates will increase by 9.9%, down from 11.1% in 2011.
Implications
David Levin -- a Buck principal and the consulting actuary who directed the survey -- said the smaller increases appear to reflect that insurers added margins to account for benefit changes under the federal health reform law in 2011 but removed the margins for 2012.
He said the trend "also reflects lower expected costs as a result of the economic slowdown," noting, "Employees are trying to reduce their out-of-pocket expenses and are postponing elective medical services."
However, Levin said, "health care costs continue to outpace both general inflation and wage increases -- creating real business challenges for organizations" (Robertson, Sacramento Business Journal, 4/9).