The cost of providing health care for employees continues to increase, especially for large multinational firms. While the increases aren't as steep as they were a few years back, a study by Aon Hewitt shows that the increases still outstrip annual inflation and are costing big employers plenty.
Aon surveyed professionals, clients and carriers that participate in its portfolio of medical plans, and found that the expected 2015 increase, before plan design changes and vendor renegotiations, will be about 10.15 percent. In 2014, overall plan costs for this group rose 10.34 percent.
"Employer-sponsored medical plans globally will dip slightly in 2015, but continue to significantly exceed general inflation levels," the report stated, noting that the anticipated increase would be 6 percent higher than the inflation rate.
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And not all regions will experience a decrease.
"While the global average medical trend is expected to mildly decline relative to the estimates in 2014, three regions — Asia Pacific, Europe and Latin America — are projected to see an uptick in rates for 2015," the report said.
Factors that are driving the pattern of double-digit cost increases for multinational employer medical plans are, according to Aon Hewitt:
- Increased utilization of private medical plans;
- Aging population in general and an aging worker population;
- Higher incidence of chronic health issues among workers.
The specific drivers of health plan cost increases worldwide were identified as cardiovascular issues, cancer and diabetes, in that order. Risk factors cited as drivers of future claims were high blood pressure, poor stress management and high cholesterol, in that order.
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Dan Cook
Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.
