Private health care inflation falls -- to 14.4%

Miracle!  A new study from Buck Surveys reports that insurance companies providing group private health care insurance expect costs to increase only 14.38% this year, down from a 15% increase last year. "This is a significant shift downward after two years of almost steady increases."

Prescription drugs represent 60-70% of the private payer health care spend and insurers have dropped their inflation factors for prescription drugs from 15.8% to 14.2%, due to "generic drug pricing reforms" in several provinces and the expiry of patent protection for several major drugs, such as Lipitor, Canada’s top selling drug.

Buck adds:
"Hospital inflation factors have declined significantly since 2007. A continuing shift from inpatient to outpatient treatments, combined with improvements in drug therapies, have been reducing employers’ spend on hospital accommodation."
Private group health insurance costs increased 13.94% in 2007, 13.76% in 2008, 14.81% in 2009, 15.0% in 2010, and now 14.38% in 2011.

These increases far outstrip public health care costs increases.

Private group insurance is primarily provided by employers to employees and often figures in collective bargaining negotiations.  The survey reflects average cost increases. The cost increases are reflected in benefit premiums, but the actual increase faced by any specific employer will vary due to factors such as usage, recovery of prior period loses, etc.

“This year’s survey results are welcome news for employers,” Michele Bossi , a leader of  Buck’s Canadian business, told Canadian HR reporter.

The Buck Survey can be found by clicking here.

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