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HEALTH CARE INFLATION FOR 2006
July 18, 2005
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Health care inflation for 2006 may be moderating. The health care rate of inflation has been at the rate of 10% to 14% since 1999. Now there is a sign the rate for 2006 may be under 10%.
The California Public Employees' Retirement System (CalPERS) recently approved HMO rate increases for 2006 that average 8.7%. Since 1999, the CalPERS HMO rate increase for the upcoming year has nearly always matched the general U.S. health care rate of inflation for that year. This 8.7% increase continues to be three times the general rate of inflation.
CalPERS buys health care for state workers, employees of various public agencies, such as local governments and school districts, retirees, and dependents. It is one of the largest buyers of health care in the U.S.
Why this slowdown in the health care rate of inflation? The answer may be that there are fewer high priced blockbuster drugs, and patient co-payments are rising.
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