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Large Employer Health Costs May Rise 4.5% in 2018: Aon

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Health benefits costs at large U.S. employers increased about 3.9% this year, to an average of $11,934, according to analysts at Aon P.L.C.

The average increased 3.1% in 2016, and it’s probably on track to increase 4.5% in 2018, the analysts report.

That average includes what the employer pays for health plan coverage, and what the employee pays for coverage. The average does not include the cost of the medical bills the employee pays out of pocket.

(Related: Benefits Firms: Health Cost Moderation to Continue in 2013)

The employer’s own costs rose 3.9% this year, to an average of $9,371 per covered employee.

The average employee’s share of the plan premiums rose 4% this year, to $2,563.

The average amount of out-of-pocket spending, or employee spending on the kind of care a plan covers, increased 10%, to $2,332.

Aon analysts base the health benefits figures on data from 450 of their large employer clients. The employers in the database offer 1,260 plans, cover about 10 million people, and may account for $54 billion in 2017 spending.

The health plan cost averages reflect the effect of changes in benefit plans and other employer effort to control costs. In some cases, for example, an employer might be paying the same amount for coverage, but the coverage it offers may give participants access to fewer doctors.

Aon analysts do not mention health savings accounts or private exchange programs in its new cost analysis.

Cost-control strategies that appear to be growing in popularity this year include imposing special rules on users of expensive specialty drugs, sending participants with chronic health problems to providers in special networks, and requiring more patients to get care from “centers of excellence.”

In the past, plans required patients seeking transplants to get care from providers on a list of centers of excellence.

Now, more employers are applying that strategy to procedures other than transplants, Aon analysts say.

About 29% of large, self-insured employer plans require participants to get some types of non-transplant care from centers of excellence, and 51% of employers Aon surveyed are considering adopting that approach in the future.

— Read Aon Hewitt: Health Price Pressure Mounts on ThinkAdvisor.

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