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Improved Diagnosis: Health Care Costs Projected To Increase More Slowly

Projected cost increases for all types of medical plans are anticipated to be down by between 0.2 and 0.6 percent through the first half of 2013, according to a survey by Buck Consultants, A Xerox Company (NYSE: XRX). This year was the first time since 2001 that Buck’s survey indicated projected cost increases less than 10 percent for any plan type, a trend that will continue into 2013.

In a national survey of 123 insurers and administrators, Buck measured the projected average annual increase in employer-provided health care benefit costs. Insurers and administrators providing medical trends for the survey cover a total of approximately 109 million people.

In its 25th National Health Care Trend Survey, Buck found costs are projected to increase at rates that are slightly lower than its prior survey, as shown in the following chart.

Type of Plan

Buck’s National Health Care Trend

25 th Survey

24 th Survey
Preferred Provider Organization (PPO) 9.7 % 9.9 %
Point-of-service (POS) 9.5 9.9
Health Maintenance Organization (HMO) 9.3 9.9
High Deductible Health Plan (HDHP) 9.6 9.9

“Despite the lower trend, though, health care costs continue to outpace general inflation – creating difficult business decisions for organizations,” said Daniel Levin, FSA, a Buck principal and consulting actuary who directed the survey. “The stubbornly high costs can be attributed to several trends, ranging from a greater use of diagnostic tests and treatments to mandated coverage of certain benefits. Employers need to decide how much of these increases to pass on to workers, or whether to drop coverage and pay the penalties imposed by the Affordable Care Act.”

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