By Catherine Hubbard, Washington Staff Writer

Health care benefit costs for employers continue to rise faster than the rate of inflation, but 2008's increases will be smaller than the previous year's, and the lowest since 2001, based on the results of a new survey.

Health care costs are expected to increase on average 10.6 percent in the next 12 months, according to Aon Consulting Worldwide, Chicago. Aon Consulting surveyed more than 70 leading health care insurers, representing more than 100 million insured individuals, and found that health care costs are projected to increase by 10.6 percent for HMOs, 10.5 percent for POS plans, 10.7 percent for PPOs, and 10.5 percent for consumer-driven health plans.

These represent the lowest trend rate increases since the study began in 2001, and are slightly lower than one year ago, when HMO cost increases were 10.9 percent, 10.8 percent for POS plans, 11.2 percent for PPOs and 10.7 percent for CDH plans, according to an August 12, 2008 release.

Bill Sharon, senior vice president with Aon Consulting and director of the study, attributes the decrease in the medical trend rate to more employers and employees taking advantage of wellness, health promotion and consumer driven programs.

"But more must be done to truly stem the tide of rising health care costs. This includes greater senior management support for these programs, better employee communications and more consistent cooperation from the medical community," he said.

Aon also found that prescription drug costs are expected to increase 9.2 percent, which is slightly lower than the 9.5 percent trend rate one year ago. The specialty pharmacy trend rate is 12.2 percent, down from 15.1 percent in spring 2007.

Aon Consulting points to the sluggish rate of drug adoption across the board, compounded by the Food and Drug Administration's reduced rate of drug approvals--especially for new molecular entities and biologic products--as the contributing factors leading to this decline.

In addition, health care rate increases for retirees over the age of 65 are projected to be 7.3 percent for Medicare Supplement plans and 7.7 percent for Medicare Advantage plans, down from 11.2 percent and 9.2 percent, respectively, one year ago.

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