Health Insurers’ Claims Cost Continues to Rise
The cost of claims in employer-sponsored health plans continues to increase, although the rate is slightly lower than six months ago.
A new trend survey by Wells Fargo Insurance Services projects that overall claim cost will continue to increase in the low double-digits.
The nationwide survey was conducted between February and March 2011 with more than 60 insurers participating, according to Wells Fargo.
Reflecting claim activity over a six-month period, projected increases in the national average cost of claims include:
- Health maintenance organizations (HMO) and point-of-sale plans (POS) — 9.6 percent increase
- Preferred provider organizations (PPO) and consumer driven health plans (CDHP) — 10 percent increase
- Exclusive provider organizations (EPO) — 10.6 percent increase
- Indemnity plans — 11.1 percent increase
- Prescription plans — 8.7 increase
Dan Gowen, senior vice president of Wells Fargo Insurance Services, said the continued cost increase suggests employer premiums will rise at a similar rate, as insurance companies anticipate costs based on claim trends.
Gowne said insurers expect higher claim costs as a result of market changes brought on by federal healthcare reform. The survey found that claim cost is also influenced by increased use of healthcare services, an aging U.S. population, improvements in medical technology and drug therapies, use of specialty drugs to treat complex diseases, changes in provider treatment patterns, and inflation.
The survey showed that in comparison to the prior six months, dental and vision benefit products remain stable.