Health insurers claim costs are set to increase by 7 percent to 10 percent, a strong indication that employers' premiums will soar in 2015 and 2016, according to a recent survey from the Spring Healthcare Trend Survey from Wells Fargo Insurance.
The survey, which analyzed more than 65 insurers nationwide, found that medical claim trends for health maintenance organizations are projected at 8.6 percent for 2016, up from 2015's average of 7.2 percent. The projected average for preferred provider organizations in 2016 is 8.7 percent, up from 2015's average of 7.9 percent.
Prescription drug costs will continue to rise as a result of price increases in generic drugs, the survey found, while healthcare claim trends for 2016 also are expected to increase for most products.
The survey also noted that the Cadillac tax--an excise tax that will be charged to employers based on how much their plan exceeds the excise threshold, effective in 2018--will impact employers' premiums. So far, 38 percent of large employers will likely hit the excise tax threshold come 2018 if they don't make changes to their plan design.
Another factor that will impact rates is the fact that the individual mandate penalty was too low to encourage the uninsured to obtain coverage. As a result, those who did sign up for plans on the health insurance exchanges tended to have previously unmet medical needs, which cost insurers more.
Insurers were due to submit their 2016 rates by Friday, May 15, and some have made their rates public. BlueCross BlueShield of Tennessee, for instance, proposed a 36 percent average premium increase that ranges from 19.5 percent to 59.5 percent in one plan, reported Healthcare Payer News.