Nearly three-fourths (71%) of respondents indicated they expect higher or significantly higher medical cost trends over the next five years, Watson said in a press release. More than eight of 10 (81%) insurers reported that medical costs are eclipsing the general rate of inflation in their country.
The poll results showed an expected 11% increase in medical cost trends in the U.S. for 2008, compared to 8% in 2007. “Many of the factors causing U.S. employers to experience significant increases in their health care costs – such as increased utilization, expensive medical technology and an aging population – are having comparable effects throughout the world,” said Francis Coleman, a senior international health care benefits consultant with Watson Wyatt, in the press release.
Insurance companies in Asia and Africa are expecting double-digit increases in employer medical costs in 2008 (19.6%), with the exception of companies in Hong Kong (9.1%) and Singapore (7.5%), according to the poll. The same is true in Latin America, except for Brazil and Chile, where costs are expected to increase by around 7%. In Europe, most insurers – except those in Italy (11.3%) – are projecting increases in the single digits.
Poll results are based on a Watson Wyatt survey of 85 insurance companies that provide medical insurance to employers throughout Asia, Africa, Europe, and the Americas.
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