September 27, 2016

2017 Segal Health Plan Cost Trend Survey

Health benefit plan cost trend rates for 2017 are projected to be similar to prior levels for most medical plan options. However, carved-out prescription drug benefit cost trends for active populations continue to increase at double-digit rates, according to forecasts compiled in the 2017 Segal Health Plan Cost Trend Survey, Segal Consulting’s 20th annual survey of managed care organizations, health insurers, pharmacy benefit managers and third-party administrators. Trend Survey, the 20th annual survey of managed care organizations (MCOs), health insurers, pharmacy benefit managers (PBMs) and third-party administrators (TPAs) conducted by The Segal Group of which Sibson Consulting is a member.

Here are some of the key findings from the survey and our observations about actions plan sponsor may want to take in response:

  • Health benefit plan cost trend rates for 2017 are projected to be similar to prior levels for most medical plan options. However, carved-out prescription drug benefit cost trends for active populations continue to increase at double-digit rates. Given the increasing number of pharmaceutical products now available for conditions that require the use of specialty medications, plan sponsors should implement strategies to manage patients who use these drugs and target their costs.
  • Health care cost increases continue to outpace general inflation by almost eight times. Plan sponsors should consider implementing vendor performance guarantees that cap average network provider increases to overall CPI plus a margin
  • Managed care networks have competitive advantages in different regions of the country, by specialty type and by product. Plan sponsors should conduct an analysis of competing vendors’ current provider pricing, network leasing fees, provider payment alternatives and network panels.