The average cost increases for employer-sponsored medical plans globally will be 9.1% in 2016 – 5.5% higher than the global average projected inflation rate of 3.6%, according to a report from Aon Hewitt.
According to Aon, 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.
The provider said average trend rates for all regions are expected to exceed average regional inflation levels by at least 4%
Aon Hewitt’s 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.
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 aging, overall declining health, poor lifestyle habits particularly in emerging countries, continued cost shifting from social programs and an increase in utilization of employer-sponsored health plans."
He added: "Regardless of the underlying medical insurance system, employers around the world are continuing to experience added organizational cost and lost workforce productivity as a result of these factors."
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Aon Hewitt’s report found that cardiovascular issues, cancer and gastrointestinal issues were the most prevalent health conditions driving health care claims around the world.
The global risk factors expected to drive future claims — and contribute to the adverse experience driving high medical cost increases — were primarily non-communicable diseases: high blood pressure, obesity and high cholesterol, followed by physical inactivity.
Francois Choquette, global benefits practice leader at Aon Hewitt, said: "Many of the factors driving global cost increases are directly linked to modern lifestyles and their incidence can be significantly reduced if individuals modify their behaviours.
"Employers in every country need to accelerate their efforts at helping employees both understand their own health risks and motivate them to take steps to improve their health."