Aon Survey Shows Double Digit Health Care Cost Increases

August 12, 2008 ( - Health care costs are expected to increase on average 10.6% in the next 12 months, according to Aon Consulting Worldwide.

Aon Consulting’s survey of more than 70 leading health care insurers, representing more than 100 million insured individuals, found that health care costs are projected to increase by 10.6% for health maintenance organizations (HMOs), 10.5% for point-of-service (POS) plans, 10.7% for preferred provider organizations (PPOs), and 10.5% for consumer-directed health (CDH) plans. An Aon news release said the increases are the lowest trend rate increases since the study began in 2001, and are slightly lower than one year ago, when HMO cost increases were 10.9%, POS plan increases were 10.8%, PPO cost increases were 11.2%, and CDH plan increases were 10.7%.

Bill Sharon, senior vice president with Aon Consulting and director of the study said in the new release that the decrease in the medical trend rate can be attributed to more employers and employees taking advantage of wellness, health promotion, and consumer-driven programs.

The survey also found that prescription drug costs are expected to increase 9.2% – slightly lower than the 9.5% trend rate one year ago. The specialty pharmacy trend rate is 12.2% – down from 15.1% in spring 2007.

In addition, health care rate increases for retirees over the age of 65 are projected to be 7.3% for Medicare Supplement plans and 7.7% for Medicare Advantage plans, down from 11.2% and 9.2%, respectively, one year ago.

“Aon Consulting’s survey reports the expected future increase in employer-provided health plan claims cost before any plan changes, based on the opinions of health plan actuaries,” said Sharon, in the news release.