Benefits June 5, 2007

Aon: Health Care Plan Costs Slow from One Year Ago

June 5, 2007 (PLANSPONSOR.com) - Health care costs are expected to increase 11% in the next 12 months, according to Aon Consulting's Health Care Trends Survey.
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In a press release, Aon said the survey of more than 70 health insurers found that Preferred Provider Organization (PPO) plans are expected to see the greatest cost increase at 11.2%, followed by health maintenance organizations (HMOs) (10.9%), Point-of-Service (POS) plans (10.8%) and consumer-driven health plans (CDHPs) (10.7%).

For each of the plan categories, the rate of increase was lower than a year ago, when increases were 12% or more, except for POS plans.

Bill Sharon, senior vice president with Aon Consulting and director of the study, offered several reasons for the double-digit increases, including:

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  • Increasing patient demand for health care services as the population ages;
  • Rising medical technology and hospital costs;
  • Increasing price and utilization of prescription drugs;
  • Poor lifestyle choices.

Other survey findings included:

  • Health care rate increases for retirees over the age of 65 are projected to be 11.2% for Medicare Supplement plans and 9.2% for Medicare Advantage plans.
  • For prescription drugs, general pharmacy costs are expected to increase by 9.5% for prescription drugs, compared with 12.2% one year ago.
  • Specialty drug costs will increase by 15.1%, down from 17% from spring 2006.

For a full copy of the survey go here .

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