Reform expected to add 1.1% to plan costs

The reform law will have little effect on medical and prescription costs for 2011, but other factors will push costs up 10 percent or more, says the 2011 Segal Health Plan Cost Trend survey. The Patient Protection and Affordable Care Act will have a modest effect: Preferred-provider organizations and point-of-service plans will have slightly higher costs, and high-deductible plans and indemnity plans, slightly lower.

Edward A. Kaplan, a senior vice president at Segal & Co., says that 2008 “was the bottom of a downward pattern, with costs returning to an upward direction in 2009. A short-term driver of health plan costs is the cost of compliance associated with the PPACA. More than three quarters of those we surveyed said that the act’s impact would result in an increase in overall health plan costs of more than 1 percent.” Seventy-eight percent expect an increase of 1.1 percent or more.

One consistency the survey identified is prescription drug costs for retail and mail order combined — the increases have remained below 10 percent for the last three years. Managed care organizations, health insurers, PBMs, and third party administrators took part in the survey.

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