Prescription Costs Projected to Rise to Nearly 10% According to 2024 Segal Health Plan Cost Trend Survey
September 14 2023 - 3:01PM
Business Wire
Anti-obesity drugs to account for more than
half of all diabetes drug therapy claim costs
The projected annual cost trend for outpatient prescription
drugs is expected to approach 10 percent, coming after three years
of actual trend exceeding projections, according to new data from
the 2024 Segal Health Plan Cost Trend Survey, released by leading
benefits and HR consulting firm Segal. Additionally, the per-person
cost trend for open-access PPO/POS plans is projected to be 6.8
percent and the medical trend projections for Medicare-eligible
retirees with Medicare Advantage PPO plans is forecasted to be 4.9
percent. The projected rise is to be driven by factors including
prescription drug inflation, which continues to be the primary
driver for inpatient hospital, physician and overall prescription
medication trends.
Specialty drug trend alone is projected to be nearly 15 percent,
driven by higher utilization of new high-cost specialty drugs
replacing lower-cost therapies. Diabetes, autoimmune disease and
psoriasis have been the top three disease indications for
prescription drugs over the past few years. However, since the
first quarter of 2021, anti-obesity medications have shown the
greatest growth, climbing 114 percent. This is due to many factors,
including the off-label, weight-loss use stemming from social media
buzz and exponential market investments in anti-obesity drugs as
well as the American Diabetes Association recommending GLP-1
medication to reduce health complications. GLP-1 drugs will account
for more than half of all diabetes drug therapies claim costs by
the end of this year.
“Given inflationary pressure, rising acuity, shifts in treatment
patterns, as well as legislative, regulatory, and judicial
developments impacting health benefit plans, it is vital for plan
sponsors to regularly monitor their plan claims to address cost
drivers,” said Eric Miller, Vice President and Consulting Actuary
in the National Health Consulting and Analytics practice at Segal.
“The Segal team continues to develop innovative cost mitigation
strategies so that plans can still maintain their quality of care
despite rising costs.”
The Segal survey, now in its 27th year, is recognized as one of
the most definitive surveys on employer-sponsored health plans.
Participants include health insurers, managed care organizations
(MCOs), pharmacy benefit managers (PBMs) and third-party
administrators (TPAs). Survey respondents represent more than 80
percent of the commercially insured and self-insured market.
Respondents shared their trend forecasts for medical, prescription
drug, dental and vision coverage and actual health cost trends
based on their group health plan experience. In addition, Segal’s
annual survey report provides insight on how plan sponsors can
address growing health costs.
About Segal
Segal delivers trusted advice that improves lives. Segal is a
privately owned benefits, human capital, communications,
technology, insurance brokerage and investment consulting firm with
more than 1,000 employees throughout the U.S. and Canada. Segal,
Segal Marco Advisors and Segal Benz are all members of the Segal
family.
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Amira Rubin 212-251-5322