Many factors contribute to the rising cost of providing insurance, including expensive medical treatment, health issues related to obesity and an aging population, the number of unemployed taking advantage of short-term benefits and the effect of the new health care law. In a survey of about 60 health organizations around the country earlier in the year, Aon Consulting, a subsidiary of insurance broker Aon Corp., found that insurers expect to pay out 10.7 percent more in claims for preferred provider organization, or PPO, managed care.
PPO plans generally offer a wider choice of participating doctors than health maintenance organizations, and they were the most common form of insurance found in the survey. Costs behind HMO plans and several other forms of insurance are expected to rise between 10.5 percent and 12.4 percent, depending on the type of coverage.
The premiums that workers pay may not grow at the same clip as the cost of claims. Premiums can be influenced by geography, an insurance plan's design, the health of the people covered and insurer profitability, said Tom Lerche, Aon Consulting's health care practice leader.
Last year, for instance, Aon Consulting also found that insurers expected to pay out 10.7 percent more in claims costs for PPO plans for 2010. But a recent study from the Kaiser Family Foundation and the Health Research and Educational Trust found that total premiums
the amount split by the employer and employee for all forms of employer-sponsored insurance rose a much more modest 3 percent for family coverage and 5 percent for single employees this year.
The Kaiser study also found that companies passed most of their premium increases on to employees instead of absorbing them as they normally do.
Lerche said employees still may be asked to make bigger contributions toward insurance next year, possibly by paying a larger percentage of the total premium or by sharing more of the cost through higher deductibles or co-insurance payments.
"We're in difficult economic times, so the underlying factors driving medical costs higher remain," he said.
Aon estimates that the health care law could increase costs by between 2 percent and 5 percent over the next three years. The law, which was passed by Congress in March, is starting to go into effect, but most of it will not be fully implemented until 2014.
Aon didn't predict the influence the law would have on costs next year, but Lerche estimated it probably will be toward the lower end of that range because only a handful of the bill's provisions will be in place.