Behind the Numbers Healthcare Cost Trends for 2008

Healthcare cost trends in the private sector tend to be cyclical, and the health industry is currently in a period of decelerating growth. For 2008, this is expected to mean a return to single-digit increases in benefit expenses for employers and employees. For private payers, the medical trend is expected to be lower in 2008 compared with 2007. Based on discussions with private insurers, medical costs are expected to rise by 9.9% for preferred provider organizations (PPOs), 9.9% for health maintenance organizations (HMOs)/point of service plans (POSs)/exclusive provider organizations (EPOs), and 7.4% for consumer-directed health plans. This compares with estimates of 11.9%, 11.8% and 10.7%, respectively, in the prior year.

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