Medical plan costs are predicted to grow at double-digit rates in the next year, according to Aon Consulting's 2010 Health Care Trend Survey, which interviewed more than 60 health care insurers, representing more than 100 million insured individuals. Aon Consulting has determined health care costs are expected to rise by 10.5 percent for HMOs, 10.6 percent for POS plans, 10.7 percent for PPOs and 11 percent for CDH plans - a slightly higher rate than last year's increases of 10.4 percent for HMOs, 10.4 percent for POS plans, 10.7 percent for PPOs and 10.5 percent for CDH plans.
In the next year, Aon Consulting forecasts an 8.4 percent prescription drug cost trend, a decrease from 9.3 percent in the spring of 2009, and a 14 percent specialty pharmacy trend rate is expected, rather than last year's lower 13.2 percent.
For retirees over the age of 65, health care rates are projected to hit 7.5 percent for Medicare Supplement plans and 6.7 percent for Medicare Advantage plans, Aon Consulting says, which is up from 6.6 percent and down from 7.3 percent from the spring of 2009.
Over the next three years, a 2 percent to 5 percent medical trend increase is anticipated because of the health care reform law, Aon Consulting reports. As health carriers pass costs from further regulation and eliminate taxes, additional costs will become evident, and providers facing Medicare reimbursement reductions may try to shift costs to an employer-based system.
"As employers start to fully understand the long-term cost impact of health reform, many are looking to redesign their health plans," says John Zern, U.S. health and benefits practice director of Aon Consulting. "Strong employee wellness and prevention programs, along with institutionalized best practices in care delivery, are key components to a successful redesign."
To cope with growing costs, employers can offer an inclusive wellness program, Aon Consulting notes. Grants to help launch wellness programs will be available for smaller employers in 2011, and in 2014, employers can reward participating employees up to 30 percent of the cost of coverage. Existing wellness regulations allow up to 20 percent.
"Investments in well-designed health management and wellness programs can create a healthier and more engaged employee," says Dr. Paul Berger, U.S. health and benefits chief medical officer of Aon Consulting. "Long term, employers are likely to see a decrease in chronic diseases and an increase in employee productivity with reduced absence. Comprehensive wellness and health management programs also can be an important factor in the recruitment and retention of employees."
Employers will also likely increase deductibles, co-pays, out-of-pocket maximums and employee contributions as well as implement consumer-driven health plans, Aon Consulting says.
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