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."
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. Aon Consulting points to the sluggish rate of drug adoption across the board, compounded by the FDA's reduced rate of drug approvals—especially for new molecular entities and biologic products—as the contributing factors leading to this decline.
Healthcare 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.