News | June 19, 2007

Healthcare Costs to Increase At Slower Pace in 2008

June 20, 2007 - The nation's employers can expect a return to single-digit increases in health benefit expenses in the year ahead, reports PricewaterhouseCoopers LLP, which recently released the first reported projections of healthcare cost trends for 2008.

Unlike health plan premium forecasts, medical cost trends reflect the underlying numbers for actual medical costs by plan design. They are used by private insurers and employers to compare health plan costs year over year, ultimately to set premium levels and design the benefit packages that will be offered to employees in the fall.

According to PwC, private insurers are anticipating an average increase in medical costs by 9.9 percent for preferred provider organizations(PPOs), 9.9 percent for health maintenance organizations (HMOs)/point of service plans (POSs)/exclusive provider organizations (EPOs) and 7.4 percent for consumer-directed health plans. This compares to increases of 11.9 percent, 11.8 percent and 10.7 percent, respectively, in the prior year.

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