Employer healthcare costs and premiums are likely to climb faster than inflation in 2023 and 2024, according to findings released Tuesday in Buck’s 44th National Healthcare Trend Survey.
The annual survey, which included more than 100 health insurers and health plan administrators, analyzed the trend factors used by health insurers and third-party administrators to project employers’ future healthcare costs.
“While there has been an uptick in the price of gas, food and other goods and services as a result of inflation, it does not appear to have yet been generally reflected in the medical trend factors used by insurers to set premium rates,” Harvey Sobel, FSA, a principal and consulting actuary at the consulting, technology, and administration services firm who directed the survey, said in a statement. “As providers renegotiate their fees with insurers, we expect to see higher medical trend factors in the future as medical trends have historically outpaced general inflationary increases.”
Factors contributing to the high rates of increase, according to the research, include greater use of diagnostic tests and treatments, Medicare and Medicaid fee limits, higher provider administrative costs due to regulatory scrutiny, industry consolidation and higher costs associated with advances in medical technology and treatments.
Some respondents cited changes in their negotiated provider rates, changes in utilization and COVID-19 as contributing to changes in their trend factors, for both decreases and increases in costs. Participants said that plans that supplement Medicare (excluding for prescription drugs) actually decreased by 0.5% – from 5.59% to 5.07% — following seven consecutive increases from the 3% reported in 2018.
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