Global Medical Cost Increases in 2016 expected to
be 2.5 Times Higher Than General Inflation
New Aon Analysis Projects Average Cost Increases to Top 9% Globally
LINCOLNSHIRE, Ill., January 14, 2016 /PRNewswire/ -- A new report from Aon Hewitt, the global
talent, retirement and health solutions business of Aon plc, estimates that the average cost increases
for employer-sponsored medical plans globally will be 9.1 percent in 2016. This is 5.5 percentage
points higher than the global average projected inflation rate of 3.6 percent.
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.
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. Still, average trend
rates for all regions are expected to exceed average regional inflation levels by at least 4 percentage
points.
"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," said Wil
Gaitan, senior vice president and global consulting actuary at Aon Hewitt. "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."
Average Medical Trend Rates by Region
2015
Medical
trend rate
2016
Annual general
inflation rate
Medical
trend rate
Annual general
inflation rate
Asia Pacific
10.4%
4.2%
9.4%
3.2%
Europe
5.7%
1.6%
5.9%
1.6%
Latin America and
Caribbean
16.7%
6.9%
20.0%
11.0%
Middle East and
Africa
13.3%
6.6%
11.6%
6.3%
North America
5.3%
1.6%
5.8%
1.5%
Global
8.7%
3.2%
9.1%
3.6%
Global Factors Impacting Medical Trend Rates
Aon Hewitt's report found that cardiovascular issues, cancer and gastrointestinal issues were the
Risk. Reinsurance. Human Resources.
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.
"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 behaviors," said Francois Choquette,
global benefits practice leader at Aon Hewitt. "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."
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About Aon
Aon plc (NYSE:AON) is a leading global provider of risk management, insurance brokerage
and reinsurance brokerage, and human resources solutions and outsourcing services. Through its
more than 72,000 colleagues worldwide, Aon unites to empower results for clients in over 120
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SOURCE Aon Hewitt
Risk. Reinsurance. Human Resources.