HMO to Impose Whopper Cost Hikes

June 21, 2002 ( - Companies signing up with health maintenance organizations (HMOs) to provide employee health coverage will have to dig even deeper in 2003 with costs expected to surge by an average of 16.2%, according to a survey.

The Aon survey said the latest results mark a continuing shift in the landscape of health care plans since HMO’s cost hikes have traditionally lagged those imposed of other types of plans, such as preferred provider organizations (PPO) and point of service (POS) plans.

In brief, the forecast for medical plan increases are as follows:

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  • for Idemnity plans, 18.3% with prescription medication, 17.1% without,
  • for HMOs, 16.2% with prescription medication, 14.6% without,
  • for POS plans, 16% with prescription medications, 14.5% without, and
  • for PPO programs, 16% with prescription medication and 14.5% for those without

Further, Aon found that:

  • pharmacy plans are expected to rise at a 17.8 % clip,
  • all dental plans are expected to fall by below 10%, except for dental HMOs, which are expected to increase by 4.4 %, and
  • vision plans are forecast to rise 3.2%

Twice a year, Aon surveys major providers of medical, dental, pharmacy and vision plans for its cost-hike forecasts.