By Dinah Wisenberg Brin
Of DOW JONES NEWSWIRES
Employers' health-care costs are projected to climb at the lowest rate since 2001 over the next year, with an estimated 10.6% average increase in most types of plans before any changes in benefits, Aon Corp.'s (AOC) Aon Consulting Worldwide said Tuesday.
That compares with an average projected increase of 10.9% a year earlier.
Health costs, however, continue to rise much more steeply than consumer prices overall, and a separate survey by an insurance commissioners' association found that individuals are cutting back on their medical care to save money in a soft economy.
Aon, which in the spring surveyed more than 70 leading health insurers representing more than 100 million insured individuals, found that health costs are projected to increase over the next year by 10.6% for health maintenance organizations, 10.5% for point of service plans, 10.7% for preferred provider organizations and 10.5% for high-deductible "consumer-driven" health plans.
These rates for plans covering active employees and retirees younger than 65 represent the lowest increases forecasted in Aon's spring survey since the consulting firm started compiling the information early this decade, although a relatively modest downtick from last spring's numbers. In addition, the projected increases are largely unchanged from Aon's fall 2007 survey, with slight increases in the trend rate in some categories and reductions in others.
Study director Bill Sharon attributed the deceleration in cost increases to more employers and employees using wellness, health promotion and consumer-driven programs. The Aon spring survey forecasts health care trend rates for 12-month periods starting from April 2008 to September 2008.
"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 Consulting's U.S. health and benefits practice director, John Zern, said in a statement.
Prescription drug costs are projected to increase by 9.2%, slightly down from last year's estimate and significantly lower than in earlier years, Aon said, attributing the deceleration to a sluggish rate of drug adoption and the government's reduced rate of drug approvals.
Cigna Corp. (CI), Aetna Inc. (AET) UnitedHealth Group Inc. (UNH), 37 Blue Cross Blue Shield plans, including organizations owned by WellPoint Inc. (WLP), and pharmacy benefits managers Medco Health Solutions Inc. (MHS), Express Scripts Inc. (ESRX) and CVS Caremark Corp. (CVS) contributed to Aon's survey.
Regulators' Group: Patients Cut Back
Meanwhile, a separate survey released Tuesday by the National Association of Insurance Commissioners found that consumers are cutting back on medical care to save money.
In a national survey of 686 people conducted in July, 22% of consumers said they had reduced their number of doctor visits as a result of the weak economy, the NAIC said. The survey also found that 11% had cut back on the number of prescription drugs they take or the dosage of their medications to make the prescription last longer.
"Delaying medical treatment and regular physicals puts consumers at risk for potential health issues, and increases overall health insurance costs," said NAIC President and Kansas Insurance Commissioner Sandy Praeger in a statement. "It's critical that consumers continue to take responsibility for their health, so that we can all benefit from healthier lives and more affordable healthcare."
The NAIC survey also found that the vast majority of consumers have not reduced, canceled or otherwise changed their health, auto, homeowners or life insurance policies.
On the Web: www.naic.org; www.aon.com
- By Dinah Wisenberg Brin, Dow Jones Newswires; 215-656-8285; dinah.brin@dowjones.com
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(END) Dow Jones Newswires
August 12, 2008 15:51 ET (19:51 GMT)