Aon’s report reflects the medical trend expectations of employer-sponsored medical plans in more than 90 countries
based on reported data from Aon professionals, clients and carriers represented in the portfolio of Aon medical plan
business in each country.

According to Aon, projected medical trend rates are expected to vary significantly by region. For example, countries in Latin America and the Middle East should expect to see a sizeable jump in average medical premium rate increases from 2016 to 2017, while Asia Pacific and Europe are projected to see lower
rates of increase for 2017. Despite variations in regional trend rates, all regions are expected to exceed average regional inflation levels by at least 4 percentage points.

“Medical cost trend rates continue to increase due to many factors, including global population aging, poor lifestyle habits in emerging countries, cost shifting from social programs and the increased prevalence and utilization of employer-sponsored health plans in many countries,” said Wil Gaitan, senior vice president and global consulting actuary at Aon. “Today’s multinational employers are experiencing the increased costs and complexities across their organizations with lowered productivity levels due to the aforementioned factors.”

Poor health habits
Aon’s report revealed that cardiovascular, cancer and respiratory conditions were the most prevalent health conditions driving health care claims around the world. The global risk factors expected to drive future claims—and contribute to the adverse experience driving high medical cost increases—continue to be primarily non-communicable diseases: high blood pressure, high cholesterol, and physical inactivity. “Many of the factors driving the upward momentum for higher medical costs are ones that individuals can change when the appropriate support and programs are available,” noted Tim Nimmer, chief health care actuary at Aon. “Employers can play a key role by motivating individuals and their families to take a more active role in managing their health, including participating in health and wellness activities and better managing chronic conditions that frequently drive higher costs for
treatments.”

Employer strategies
Aon’s report found cost sharing, managing provider networks and making plan design changes were the top strategies for controlling costs globally, though strategies vary slightly based on region. For example, while cost sharing is the most prevalent strategy in Asia Pacific and Middle East/Africa, managing provider networks is the preferred strategy for employers in Europe and Latin America.

“Many of these approaches will not be as effective in the future, and employers will need to adopt more innovative
strategies to mitigate costs and influence the health and wellbeing of their employee population,” said Francois
Choquette, leader of Aon’s Global Benefits practice.