Drug costs on the rise in 2000

March 1, 2000

Pharmaceutical Representative

Drug cost increases will exceed 18% for 2000 – leading to a significant increase in total health plan costs - according to a study from the Segal Co., a consultant and actuary firm serving human resources, employee benefits and compensation programs in the U.S., Canada and abroad.

Drug cost increases will exceed 18% for 2000 – leading to a significant increase in total health plan costs - according to a study from the Segal Co., a consultant and actuary firm serving human resources, employee benefits and compensation programs in the U.S., Canada and abroad.

Highlights of the 2000 Segal Health Plan Cost Trend Survey include:


•Â Costs for prescription drugs in 2000 are expected to see the highest trend rates of all coverages studied.


•Â Non-network fee-for-service, preferred provider organization, point-of-service and health maintenance organization plans' claim costs trends are all projected to be higher for both the group of actives and retirees under age 65 and retirees age 65 and over in 2000 than 1999 projections.


•Â Trends in dental coverage will vary by plan type. 2000 projections will be lower than 1999 projections for non-network fee-for-service and network fee-for-service. Trend rates for prepaid dental plans, however, are projected to be higher in 2000 than in 1999.

According to Segal, the survey indicates that prescription drug rates of use will continue to increase at a rate double that of the HMO trend (for HMOs that include prescription drug coverage). At this rate of increase, prescription drug claim expenses are expected to approach 15% of active health plan costs and over 40% of retiree healthcare costs by the year 2001. But the company admits that the higher prescription rate may be due in part to a shift from medical and surgical treatments to drug therapies. PR

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