Average cost increases for global employer-funded medical plans are expected to reach 9.1% this year, according to research by Aon Hewitt.
Its research, which is based on data from Aon professionals, clients and carriers within its medical plan business portfolio, also found that the average cost of employer-funded health plans in the UK is projected to rise by 9.3% in 2016, compared to 7.8% in 2015.
The research also found:
- The cost of employer-funded plans is expected to increase by 20% in Latin America and the Caribbean, 5.8% in North America, and 5.9% in Europe in 2016. This compares to medical trend rates of 16.7%, 5.3% and 5.9%, respectively, in 2015.
- Medical trend rates of 9.4% and 11.6% are projected for Asia-Pacific and the Middle East and Africa in 2016, compared to average cost increases of 10.4% and 13.3%, respectively, for employer-funded medical plans in these regions in 2015.
- Projected medical trend rates for 2016 are higher than the expected average general inflation rates across all regions.
Wil Gaitan, senior vice president and global consulting actuary at Aon Hewitt, said: “We expect medical costs to continue to escalate around the world due to global population ageing, overall declining health, poor lifestyle habits particularly in emerging countries, continued cost shifting from social programmes and an increase in utilisation of employer-sponsored health plans.
“Regardless of the underlying medical insurance system, employers around the world are continuing to experience added organisational cost and lost workforce productivity as a result of these factors.”
Carl Redondo (pictured), leader of Aon’s global benefits practice in the UK, added: “In-depth analytics can inform an employer of its own particular risks versus the market in general. Trends in claim patterns can quickly allow employers to target the most effective mitigating actions.”