Health plan cost trends will increase more than four times more than the annual increase in the average hourly wage of American workers in 2010.

It’s the same ol’ song into 2010 as health cost trends for plans will see double-digit increases as high as 13.3% for fee-for-service (FFS) plans. Even the most tightly managed plans in HMOs expect over 10% cost trend in 2010.

Prescription drug cost trend will be moderately bent back, with drug plans expected to increase by an average of 9.1% for retail. This is a drop from 2009, when Rx trend costs at retail rose nearly 10%.

These trends are published in the 2010 Segal Health Plan Cost Trend Survey in August 2009.

High-deductible health plans, seen by consumer-directed health plan proponents as a strategy for managing cost trend, will grow in trend by 11.9% — a full percentage point more than point-of-service plans.

Hospital cost trend will grow more than either physician or prescription drug trends. However, utilization of physician services is still expected to increase more in 2010 than in 2009.

Health Populi’s Hot Points:
Plan sponsors — employers and governments — will continue to confront double-digit cost increases for covering enrollees. From the workers’ standpoint, these cost increases consume any hope of receiving wage increases.

Segal notes several strategies employers et. al. will implement to stem cost trends:

1. Wellness programs that incorporate incentives tied to outcomes and participation.

2. Value-based plan designs.

3. “Strategic rationing” (Health Populi’s term) through aggressive step-therapy and prior authorization plans.

4. New and improved disease management, such as medication adherence.

5. More aggressive negotiating with prescription drug management companies for drug price concessions.

Until health plan costs can be more effectively contained, employees who receive and buy into coverage at work should expect to bear even more costs that will further erode household budgets in 2010.