According to Aon Hewitt’s 2016 study of medical trend expectations of employer-sponsored medical plans [1] in 90 countries, the cost of employer-sponsored medical plans is continuing to rise as in previous years and still significantly outpace global inflation.
| Average Medical Trend Rates by Region | ||||
| 2015 | 2016 | |||
| Medical trend rate | 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% |
North America is expected to see slightly less than 6% inflation, but regions with the most significant increases are Latin America and the Middle East, where average rates for medical insurance plans are increasing by double-digit percentages. Conversely, Asia-Pacific’s rates are projected to fall slightly, while the E.U. can expect little change at all.
Factors that currently influence these rising costs are global health issues such as aging, and poor lifestyle habits especially in emerging countries. An overall increase in the use of employer-sponsored healthcare plans is another factor driving inflation. Particularly worrisome is the rise in cardiovascular and gastrointestinal issues, as well as cancer.
Aon Hewitt notes, however, that future projected increases in insurance costs globally will be mostly due to lifestyle issues such as rampant obesity, high blood pressure and cholesterol, and low physical activity, and recommends that employers take steps now to adapt strategies that will help educate employees about healthy lifestyle and fitness.
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