Prescription Drugs Lead Health-Care Cost Increases

By 2001 The Segal Co. estimates prescription drug costs will account for 15% of all health-care costs. Prescription drug claim expenses have increased 12.9%, 16.8%, and 14.2% in the last three years and are projected to rise more than 18% this year and next. But drugs aren't the only area of rising health-care costs. Costs of fee-for-service plans have risen around 10% each of the last three years and are projected to increase nearly 14% this year. The rate of increase for preferred provider organizations, point-of-service plans, and health maintenance organizations all were lower in 1999 than in 1998, but are projected to rise anywhere from 8.9% to 11% this year -- higher than at any time in the last five years. The Segal Co. is a benefits consulting firm.

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