Aon Helps Employers Beat Health Care Trends

Aon plc reports that its large employer clients budgeted an average of $11,891 per enrollee for health care costs this year, up 3.2% from 2018, according to an analysis of the firm’s Health Value Initiative database, which captures information for more than 500 large employers representing 5.25 million lives and $62 billion in annual costs. Employers were successful at mitigating higher underlying medical cost trends through plan design changes, network strategies, vendor negotiations and other initiatives.

The analysis also shows employers are passing along a lower 2.1 percent premium increase to employees, absorbing a larger 3.5 percent increase to company costs in 2019. Plan costs represent the employer’s and employee’s combined premiums for medical and prescription drug costs but exclude employee out-of-pocket deductibles, copays and coinsurance. On average, employers will subsidize about 78% of the plan cost, with employees paying the remainder.

Aon’s clients are successfully bending the health care cost curve by optimizing delivery of care and guiding plan participants to preferred providers, better drugs, appropriate site of care and relevant programs. Employers also proactively leveraged financial measures with pharmacy vendors. Although gross prescription drug trends remain high, many companies significantly reduced their overall prescription drug costs through aggressive negotiations for discounts and rebates and through better utilization management and controls. These decisions will help large employers beat underlying trends for employer medical benefit costs, which are forecasted to rise 6.5 percent, according to the firm’s 2020 Global Medical Trend Rates Report.

“Employers need the talent to compete for innovation, revenue and other key areas of organizational success,” said Yuliya Kandratsenka, vice president and the lead of Aon’s trend team. “Health care benefit strategies can no longer be about cost-shifting to members. Employers instead are managing providers and vendors more diligently and focusing resources on those with multiple chronic conditions.”

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