A survey finds the rate of increase for costs across categories such as medical and prescription drugs has slowed but should normalize.
While healthcare costs have seen reduction in the rate of increase, inflation has yet to affect premium rates for employer-sponsored health plans, according to a report by Buck.
The human resources consulting firm released its 43rd National Healthcare Trend Survey of nearly 100 health insurers and health plan administrators, finding that the recent increase in prices is not yet reflected in trend factors payers use to set premiums.
Harvey Sobel, Buck principal, consulting actuary, and survey director, stated that claims shot up in 2021 due to residual demand from COVID-19.
"While a temporary reduction in trends is welcome, activity is projected to normalize in 2022," Sobel said. "Health plans will be under pressure to increase provider reimbursement rates in reaction to the rise in inflation as their provider contracts come up for renewal."
Health insurers and administers surveyed reported medical trend factors that vary by product, averaging 5.8% to 6.9%, down by 1-2 percentage points from the previous survey. The Preferred Provider Organization plan was at 6.4% for the average trend factor, down by 1.4% from the prior year.
With prescription drugs, insurers reported a weighted average trend of 8.1%, down 0.7% from 2021, whereas the weighted average trend reported by Pharmacy Benefit Managers increased from 6.2% to 7.5%.
On the Medicare side, the trend factor for plans continued to increase, up from 5.0% in the previous survey to 5.6%. It marks the sixth consecutive increase since 2018, when the trend factor was a reported 3.0%.
As costs rise for employer-sponsored plans, employers will also feel the brunt.
According to analysis by Aon, employee premiums from paychecks increased by 0.6% in 2022, and costs as a whole are projected to increase to more than $13,800 per employee in 2023.
Inflationary pressures combined with higher utilization rates following COVID will create financial challenges for payers and employers alike.
Jay Asser is the contributing editor for strategy at HealthLeaders.