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Healthcare Costs Expected to Rise 10.5% in Next 12 Months

John Commins, for HealthLeaders Media, August 26, 2009

Employers' healthcare costs are expected to increase 10.5% on average in the next 12 months, which is slightly lower than last year, according to a survey of leading health insurance companies.

Aon Consulting's semi-annual survey of more than 60 large healthcare insurers, covering more than 100 million people, found that healthcare costs are projected to increase by 10.4% for HMOs, 10.4% for POS plans, 10.7% for PPOs, and 10.5% for CDH plans. These are slightly lower than one year ago, when HMO cost increases were 10.6% and POS plans were 10.5%. PPOs and CDH plans remain steady at 10.7% and 10.5%, respectively.

"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," says John Zern, Aon Consulting's U.S. Health & Benefits Practice director.

Aon Consulting CMO Paul Berger, MD, says wellness and health promotion initiatives are critical in the next phase of lowering the medical trend rate. "Approximately 30% of workers have chronic medical conditions, which account for 65% of this nation's medical spend," he says. "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 healthcare costs."

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