Employers Face 10.5 Percent Health Care Cost Increases, Says Aon Consulting
August 25 2009 - 9:30AM
PR Newswire (US)
Increases consistent with a year ago, but sluggish economy creates
worse situation for many employers and employees CHICAGO, Aug. 25
/PRNewswire-FirstCall/ -- Health care costs are expected to
increase on average 10.5 percent in the next 12 months,(1)
according to Aon Consulting, the global human capital consulting
organization of Aon Corporation (NYSE:AOC). (Logo:
http://www.newscom.com/cgi-bin/prnh/20041215/CGW049LOGO) Aon
Consulting surveyed more than 60 leading health care insurers,
representing more than 100 million insured individuals, and found
that health care costs are projected to increase by 10.4 percent
for HMOs, 10.4 percent for POS plans, 10.7 percent for PPOs and
10.5 percent for CDH plans. These are slightly lower than one year
ago, when HMO cost increases were 10.6 percent and POS plans were
10.5 percent. PPOs and CDH plans remain steady at 10.7 percent and
10.5 percent, respectively. (See below for trend data from Aon
Consulting's prior health care surveys.) "Aon Consulting conducts a
health care trend survey twice a year to forecast the expected
future increase in employer-provided health plan claims cost,
before any plan changes, based on input from leading health plan
actuaries," said John Zern, Aon Consulting's U.S. Health &
Benefits Practice director. "This data helps employers evaluate the
competitiveness of health insurance premium renewals. For employers
with self-funded health plans, it helps in developing future claim
estimates for budgeting purposes. "While we're seeing a slight
decrease in the trend rates, it's still at double digits, and this
year, it's compounded by a struggling economy, lower wage
increases, and in some cases, salary freezes." Aon Consulting's
U.S. Health & Benefits Chief Medical Officer, Dr. Paul Berger,
acknowledges there has been progress in lowering the medical trend
rate during the last several years, but emphasizes there's still
significant work to be done. He suggests wellness and health
promotion initiatives are critical in the next phase of lowering
the medical trend rate. "Approximately 30 percent of workers have
chronic medical conditions, which account for 65 percent of this
nation's medical spend," said Berger. "Wellness programs provide a
strong platform for effectively managing chronic conditions and
preventing future problems, but it's up to the individual to take
advantage of the programs offered. Behavior change is never easy,
but those willing to make changes in this capacity benefit from
better health and lower health care costs." Prescription drug costs
are expected to increase 9.3 percent, which is slightly lower than
the 9.4 percent trend rate one year ago. The specialty pharmacy
trend rate is 13.2 percent, up from 12.4 percent one year ago. Aon
Consulting points to the sluggish rate of drug adoption across the
board, compounded by the FDA's reduced rate of drug approvals -
especially for new molecular entities and biologic products - as
the contributing factors leading to this decline. In addition,
health care rate increases for retirees over the age of 65 are
projected to be 6.6 percent for Medicare Supplement plans and 7.3
percent for Medicare Advantage plans, down from 7.3 percent and 7.7
percent, respectively, one year ago. To learn more about this
Health Care Trends Survey, please visit
http://insight.aon.com/?elqPURLPage=4355. About Aon Consulting's
Health & Benefits Practice Aon Consulting's Health &
Benefits Practice is a global leader, with one of the largest
wholly owned networks of worldwide offices of any consulting firm.
To learn more about Aon Consulting's health care reform
initiatives, please visit http://www.aon.com/healthcarereform.
About Aon Consulting Aon Consulting is among the top global human
capital consulting firms, with 2008 revenues of $1.358 billion and
more than 6,300 professionals in 229 offices worldwide. Aon
Consulting works with organizations to improve business performance
and shape the workplace of the future through employee benefits,
talent management and rewards strategies and solutions. Aon
Consulting was named the best employee benefit consulting firm by
the readers of Business Insurance magazine in 2006, 2007 and 2008.
For more information on Aon, please visit
http://www.aon.mediaroom.com/. About Aon Aon Corporation (NYSE:AOC)
is the leading global provider of risk management services,
insurance and reinsurance brokerage, and human capital consulting.
Through its more than 37,000 colleagues worldwide, Aon readily
delivers distinctive client value via innovative and effective risk
management and workforce productivity solutions. Aon's
industry-leading global resources and technical expertise are
delivered locally through more than 500 offices in more than 120
countries. Named the world's best broker by Euromoney magazine's
2008 and 2009 Insurance Survey, Aon also ranked highest on Business
Insurance's listing of the world's largest insurance brokers based
on commercial retail, wholesale, reinsurance and personal lines
brokerage revenues in 2008. A.M. Best deemed Aon the number one
insurance broker based on brokerage revenues in 2007 and 2008, and
Aon was voted best insurance intermediary, best reinsurance
intermediary and best employee benefits consulting firm in 2007 and
2008 by the readers of Business Insurance. For more information on
Aon, log onto http://www.aon.com/. (1) This survey forecasts the
health care trend rates for the 12-month rating periods between
April 2009 and September 2009. Media Contact: Sara Carlson Tiffany
Greco 312-381-5045 312.755.3549 The following table summarizes the
Aon Consulting Health Care Trends Survey results from 2002 -
current: Spring Spring Spring Spring 2002 2003 2004 2005 Medical -
Actives & Retirees
AON (NYSE:AOC)
Historical Stock Chart
From Jun 2024 to Jul 2024
AON (NYSE:AOC)
Historical Stock Chart
From Jul 2023 to Jul 2024