A nationwide survey of insurers and Blue Cross agencies suggests Canadian private healthcare plans continue to face steep cost increases in 2008.

The Canadian Health Care Trend Survey released Wednesday by Buck Consultants shows that despite a slight dip in the overall trend last year, cost increases for combined prescription drugs, medical plans, and hospital coverage for 2008 are estimated at 13% to 14%.

Dental care costs are expected to rise 7% to 11% due to increased utilization combined with provincially set fee guides, depending on the plan members’ province of residence. Combined total healthcare and dental care cost increases are expected to continue at double-digit rates.

“Our survey results show overall healthcare cost increases continue to outpace other business cost increases as well as the Consumer Price Index,” says Michele Bossi, practice leader in Buck’s health and welfare consulting practice. “We expect health plan costs to increase at double-digit rates for the next five to 10 years, due to increased demand for medical therapies and the aging of the population.”

According to Bossi, Canadian employers can start controlling these costs “through longer-term wellness strategies and plan design changes in the shorter term.”

According to the survey, the cost increase for prescription drugs dropped slightly to 14.09% in 2008 from 14.26% last year, but prescription drug costs still represent the largest portion of employer healthcare costs. The cost increase for medical plans alone (excluding prescription drugs) has decreased to 13.09% this year from 13.43% in 2007.

“The largest impact comes from the prescription drug trend,” says Bossi. “Generic drugs continue to gain market share as many of the leading brand-name products lose market exclusivity and growth in the pharmaceutical industry has slowed.”

The survey also suggests the overall healthcare trend (including prescription drugs, medical plans, hospital coverage, and dental care) decreased slightly to 13.76% for 2008 from 13.94% last year.

The survey analyzed responses from 10 major Canadian group insurers, representing 84% of the group health providers’ market in Canada.

For the survey on Buck’s website, click here.

Click here to read last year’s story on the survey, Rise in healthcare cost trends stabilizing: survey.

To comment on this story, email jody.white@rci.rogers.com.