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June 28, 2002
Another Double-Digit Forecast for Health Plans
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After looking at data provided by the nation's largest medical, dental, pharmacy-management, and vision vendors, Aon Consulting has concluded that HMOs will raise the cost of renewals by an average of 16.2 percent.
That prediction comes on the heels of one by Hewitt Associates, which said initial data collected from nearly 140 employers indicates HMO rates will jump by an average of 22 percent next year.
Aon said its findings mark a continuing shift in the landscape of health care plans - HMOs historically have not shown the increases of other types of plans, such as PPO (Preferred Provider Organizations) and POS (Point Of Service) plans.
"The HMO may still be the best option for some organizations," said Bill Sharon, senior vice president with Aon Consulting. "However, as they are negotiating with carriers, companies need to be certain that they are looking at a variety of options to provide the best and most cost-effective coverage for their employees."
Here, in brief, is the forecast for all types of medical plans:
HMOs:
- with prescription drugs (Rx) - 16.2 percent.
- without Rx - 14.6 percent.
POS:
- with Rx - 16.0 percent.
- without - 14.6 percent.
PPO:
- with Rx - 16.0 percent.
- without - 14.5 percent.
Indemnity:
- with Rx - 18.3 percent.
- without - 17.1 percent.
The Aon study also found that pharmacy plans are expected to rise at a 17.8 percent clip. Dental plans all fall below 10 percent, with Dental HMOs only expected to increase by 4.4 percent. Vision plans are forecast to rise 3.2 percent.
Twice a year, Aon surveys major providers of medical, dental, pharmacy and vision plans. Figures provided by the companies are aggregated and represent national averages as forecast by Aon. Results of specific companies may vary. The study is available at www.aon.com.
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