2002 Segal Health Plan Cost Trend Survey

Health plan costs are projected to escalate at a dramatic rate in 2002, according to The Segal Company's annual survey of insurers, managed care organizations, pharmacy benefit managers, and third party administrators. Prescription drug benefits continue to have the highest trend rates, which are expected to increase at an annual rate of nearly 20 percent in 2002. Traditional fee-for-service medical plans, managed care plans, and prescription drug programs will likely see cost increases that are three to five times the rate of increase in wages and salaries and general inflation. The report that follows provides trend forecasts and historical patterns for medical, prescription drug benefit and dental plans and discusses some of the factors behind the increases.