Health Care Cost Hikes Pegged at 10.5% for 2010

August 25, 2009 ( - Health care cost are expected to increase on average 10.5% in the next year, according to Aon Consulting.

class=”gprbodysub-heads” align=”left”> An Aon news release said its poll ofmore than 60 health care insurers, representing more than 100 million insured individuals found that health care costs are projected to increase by 10.4% for HMOs, 10.4% for POS plans, 10.7% for PPOs, and 10.5% for consumer-directed health (CDH) plans.

class=”gprbodysub-heads” align=”left”> The figures are slightly lower than a year ago, when HMO cost increases were 10.6% and POS plan hikes were 10.5%, according to Aon . PPOs and CDH plans remain steady at 10.7% and 10.5%, respectively.

class=”gprbodysub-heads” align=”left”> Prescription drug costs are expected to increase 9.3%, which is slightly lower than the 9.4% trend rate one year ago. The specialty pharmacy trend rate is 13.2%, up from 12.4% one year ago.

class=”gprbodysub-heads” align=”left”> In addition, health care rate increases for retirees over the age of 65 are projected to be 6.6% for Medicare Supplement plans and 7.3% for Medicare Advantage plans, down from 7.3% and 7.7%, respectively, one year ago.

class=”gprbodysub-heads” align=”left”> “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,” said John Zern, Aon Consulting’s U.S. Health & Benefits Practice director, in the news release.

Aon Consulting's U.S. Health & Benefits Chief Medical Officer, Dr. Paul Berger, acknowledged there has been progress in lowering the medical trend rate during the last several years, but emphasized there's still significant work to be done. He suggested wellness and health promotion initiatives are critical in the next phase of lowering the medical trend rate.

class="gprbodysub-heads" align="left"> "Approximately 30% of workers have chronic medical conditions, which account for 65% of this nation's medical spend," said Berger, in the announcement. "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."

class="gprbodysub-heads" align="left"> More information is available here .