Health care costs are moderating from last year's rates, but still rising by double digits in 2005 for most types of coverage, according to the semi-annual National Health Care Trend Survey conducted by Mellon.
Cost trends for 2005 are expected to range from 14.9% for indemnity coverage to 12.1% for those with HMOs. Cost for high-deductible consumer-driven plans -– defined in this survey as plan with a $1,500 deductible and a pharmacy benefit –- are projected to increase an average of 14.2%. Mellon survey is based on data provided by 83 insurers or health plan administrators in December 2004.
"Medical trend rates are coming down slightly, but they are still persistently high. It's a double-edged sword," says Harvey Sobel, a principal at Mellon and author of the report.
The top three reasons insurers gave Mellon why their medical trends dropped slightly from last year were improved financial results, better financial arrangements with doctors and hospitals, and a desire to be more competitive in the marketplace.
According to Mellon, the average cost per employee for healthcare increased 5% or $200, from 2004 to 2005.
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