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Factors that Influence Trends
Trend is the average forecasted change in health plans’ per capita claims cost. This figure is determined by insurance carriers, Managed Care Organizations, Pharmacy Benefit Managers, and Third Party Administrators. Trend projections are usually updated each quarter within a year and vary by source depending on the specific characteristics of the population being analyzed.
Trend comprises the following components:
A health plan participant pays a flat $20 co-pay for a 34 day dose of a prescription drug costing $100. If the drug price increases to $125 in the following year and the participant’s co-pay remains $20, the health plan’s liability increases from $80 to $105. This scenario represents a 31% increase in exposure for the health plan.