Premiums for U.S. group health coverage should rise a little more slowly in 2012 than they have this year – but still faster than employers can tolerate.
Aon Hewitt, Lincolnshire, Ill., a unit of Aon Corp., Chicago (NYSE:AON), gives the numbers in its latest annual employer market review released today.
Consultants at Aon Hewitt base their premium projections on information from a database of 371 large U.S. employers that provide coverage for about 13 million participants.
The Aon Hewitt consultants are expecting premiums to rise 7% in the coming year, to an average of $10,475 per employee.
The average amount an employee contributes to the premium costs is on track to rise 11%, to $2,306, and average employee out-of-pocket pockets may rise about 13%, to $2,275.
The Patient Protection and Affordable Care Act of 2014 (PPACA) could lead to big changes in premiums later, as more PPACA provisions take effect. This year, the weak economy may be a bigger influence on premiums.
The hiring slump has led to a slight increase in workers’ average age, and the older workers are more prone to catastrophic conditions, the consultants said in comments on the 2012 projections.
Workers are also suffering more from chronic conditions such as diabetes and heart disease, and that interferes with employers’ efforts to control current claims costs, the consultants said.
To cope, “employers will continue to shift cost to employees in order to keep company costs to a manageable level,” said John Zern, an Aon Hewitt executive.
Aon Hewitt also is seeing employers try more aggressive efforts to get workers to improve health habits and seek appropriate care for chronic conditions.
Aon Hewitt also is detecting employer concern differences in cost trends at different types of plans.
The average 2012 premium increase could be about 7.8% for health maintenance organization (HMO) plans and 6.6% for preferred provider organization plans.
Tim Nimmer, the Aon Hewitt chief health care actuary, said the HMO cost trend is worrisome.
If HMO costs tend to rise faster than PPO costs, “employers will be forced to discontinue current HMO contribution levels or eliminate HMO offerings altogether,” Nimmer said.