Upfront: Health-Care Cost Increases To Slow in 2005

Medical plan costs are still on the rise, but at least the rate of increase is moderating.

Medical plan cost increases will continue to hover in the double digits throughout the next year for most plan types and all categories of coverage, but the rate of increase will decelerate in nearly all coverage areas, according to The Segal Co.'s 2005 Health Plan Cost Trend Survey. Hospital and physician costs are also expected to increase at a slightly lower rate in 2005.

In addition, Segal points out that actual health-care costs are consistently lower than the projections in its annual studies. For example, in 2003 the firm expected an increase for preferred provider organizations (PPOs) of 13.2 percent; the actual increase was 12 percent.