Segal Survey Predicts Continued Declines in All Trends -- Rx Trend Drops to Single Digits

NEW YORK--(BUSINESS WIRE)--Aug 21, 2008 - The 2009 Segal Health Plan Cost Trend Survey forecasts continued declines in trends for 2009, marking the sixth consecutive year of declining trends. Most trend rates are projected to be lower in 2009 than in 2008, but cost trends for all medical plan types are higher than inflation. Key findings include:

-- Projected trend rates for point-of-service (POS) medical plans (without prescription drugs) for actives and retirees under age 65 have declined from a high of 13.7% for 2003 to 10.4% for 2009.

-- Projected retail prescription drug trends continue to decline, and have fallen from a high of 19.7% in 2001 for active employees to 9.8% for 2009. For retirees, retail Rx trend has fallen to 9.1% in 2009. This is the first time since the survey's inception that prescription drug trends are in single digits.

-- Trend rates for hospital services are projected to be 10.9% in 2009, exceeding trends for physician services and prescription drug supplies.

-- Projected medical plan trend rates for retirees age 65 and older are expected to be measurably lower than the medical plan trend rates projected for active participants and early retirees.

-- Combined PPO and POS plan projected trend rates show variation among regions - Midwest trends are projected to be 9.4% compared to 10.0% for the South, 10.5% for the Northeast and 10.6% for the West.

According to Edward A. Kaplan, Segal's National Health Practice Leader, "We are seeing plan sponsors turning to innovative designs and health improvement programs as a vehicle for containing health plan costs through cost effective treatments, reducing complications from chronic disease and lowering demand for health services. The most effective strategies include mining data to identify a plan's cost drivers, redesigning plan provisions to eliminate barriers to care and providing incentives to comply with recommended care for specific diseases."

See how trend rates have changed since 2000: http://www.segalco.com/2009trendsurveysupplement.pdf.

The complete Survey can be found at: www.segalco.com/publications/surveysandstudies/2009trendsurvey.pdf.

The Segal Company (www.segalco.com) is an independent, US-based firm of benefit, compensation and human resources consultants. Clients include corporations, non-profit organizations, professional service firms, state and local governments and joint boards of trustees administering pension and health and welfare plans under the Taft-Hartley Act.

Contact

The Segal Company
Mary L. Feldman, 212-251-5029
mfeldman@segalco.com

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