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Report: Health Care Costs Expect to Increase 10.6% in Next 12 Months
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 surveyed more than 70 health care insurers and found that health care costs are projected to increase by 10.6% for HMOs, 10.5% for POS plans, 10.7% for PPOs and 10.5% for CDH plans. These represent 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%, 10.8% for POS plans, 11.2% for PPOs and 10.7% for CDH plans.
Aon Consulting's U.S. Health &Benefits practice director, John Zern, said of the survey results: While the medical trend rate is still more than twice the consumer price index, it is encouraging to see that health care cost rate increases are continuing to slow down. This is a step in the right direction for companies nationwide that continue to feel significant health care price pressures."
Aon attributes the decrease in the medical trend rate to more employers and employees taking advantage of wellness, health promotion and consumer driven programs.
Prescription drug costs are expected to increase 9.2%, which is 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 Corp. is a provider of risk management services, insurance and reinsurance brokerage, human capital and management consulting. Aon Consulting Worldwide is a global human capital consulting firm."