The costs of employer-sponsored plans is expected to increase by 9.3 per cent, with UK medical inflation outpacing increases worldwide, according to a new report from Aon Hewitt.
Global medical cost increases in 2016 are expected to be 2.5 times higher than inflation, with average premium rises of 9.1 per cent globally and 9.3 per cent in the UK, predicts Aon.
The 9.1 per cent global increase is 5.5 percentage points higher than the global average projected inflation rate of 3.6 percent.
The report reflects the medical trend expectations of employer-sponsored medical plans in 90 countries based on reported data from Aon professionals, clients and carriers represented in the portfolio of Aon medical plan business in each country.
The figures show that projected trend rates are expected to vary significantly by region.
Both Latin America and the Middle East are expected to see double-digit average medical trend rates in 2016, while Europe and North America will experience trend rates just below 6 percent. Average trend rates for all regions are expected to exceed average regional inflation levels by at least 4 percentage points.
Aon Global Benefits practice leader, UK Carl Redondo says: “The UK is one of the worst performing markets with higher medical inflation than the European and Global averages. The pressure on the UK’s National Health Service is driving significant growth in the private healthcare sector. In particular the cost of employer sponsored medical plans continues to grow rapidly and is outstripping the medical inflation seen in other European economies.”
Aon Hewitt senior vice president and global consulting actuary Wil Gaitan says: “We expect medical costs to continue to escalate around the world due to global population aging, 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.”
