Truven on 2013 Medical Costs

Using a database on 344 employers covering 18.3 million people’s health benefits, Truven Health Analytics has released a health plan cost report which both examines past trends and projects future costs.    (Truven Report)   For the period from 2007-2011 employers generally saw per covered person per year cost increases of around 5.4%.  But this is only the employer’s share of the cost.  For employees, premium contributions and other out-of-pocket expenses such as deductibles and copays actually increased by 6.6% in this period.  Looking forward the report anticipates growth in the per member per year costs for the employer of about 4.5% in 2012 and in 2013.  In 2014, an acceleration is anticipated due to the full implementation of the reform law.  Mental health and substance abuse costs rose at the fastest rate, over 12%, followed by hospital outpatient at over 7%.  Large and medium sized employers have a trend rate that is over 1% lower than that experienced by small employers.  The requirement in the reform law that dependents be allowed to stay on the plan until age 26 had the effect of raising overall costs for employers but lowers the per member cost, since these younger persons tend to have much lower health costs.  The requirement of free preventative services also added to costs, as did the separate requirement of parity for mental health services, which are widely abused.  Truven’s analysis suggests that if employers choose to drop health care coverage and pay the penalty instead, they will save money but not as much as some people have projected and employees will obviously end up paying much more.