The impact of inflation is not yet fully reflected in medical trend factors, according to Buck. The findings were released in Buck’s 44th National Healthcare Trend Survey, a report that identifies trend factors that are used to project employers’ healthcare costs for 2023-2024.
Buck’s annual survey of nearly 100 health insurers and health plan administrators covering more than 100 million plan participants found that while medical trend factors have yet to fully adjust for recent inflationary increases, they continue to increase at a rate consistent with trends reported in the prior survey, which will likely drive healthcare premiums higher in the coming year.
“While there has been an uptick in the price of gas, food and other goods and services as a result of inflation, it does not appear to have yet been generally reflected in the medical trend factors used by insurers to set premium rates,” said Harvey Sobel, FSA, a Buck Principal and Consulting Actuary. “As providers renegotiate their fees with insurers, we expect to see higher medical trend factors in the future as medical trends have historically outpaced general inflationary increases.”
According to the survey, factors contributing to the high rates of increase include greater use of diagnostic tests and treatments, Medicare and Medicaid fee limits, higher provider administrative costs due to regulatory scrutiny, industry consolidation and higher costs associated with advances in medical technology and treatments.
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