Aon publishes latest medical trends report
Aon has published its 2024 Global Medical Trend Rates Report, in the wake of what it described as er a period of remarkable inflationary conditions and economic volatility.
According to Aon the series of shocks affecting economies around the world after the pandemic continue to create an unstable economic environment, despite continued signs of improvement, and it is likely that volatile conditions will persist. For example, many developing countries in Africa face the pressure of currency depreciation amid global interest rate hikes that may drive investors away from the region, thereby exacerbating the region’s dependence on increasingly expensive imports.
The report says that macroeconomic instability has had a significant impact on the medical trend in many locations around the world; however, it is not the only factor. While macroeconomic instability is a big part of the story behind the medical trend rates, it is also important to highlight the regional differences, the conditions driving the trend rate, and the ways in which companies are mitigating the increases.
Despite uncertainty on how long global inflationary pressures will persist, it is clear from the locations surveyed that the expectation for employer-sponsored medical plans is that the medical trend rate will see a sharp rise in 2024, said Aon.
Looking at regions the Aon report said that: “The upsurge in medical trend is driven by a generalised increase expected in all regions, with every global region showing an increase in trend over 2023.”
· The two regions with the highest projected increases are Latin America and the Caribbean (LAC), at 11.7 percent (up from 11.6 percent in 2023) and Middle East and Africa (MEA), at 15.1 percent (up from 14.5 percent a year ago).
· Europe’s projected trend for 2024 is 10.4 percent, which is up from 9.1 percent in 2023 and nearly double its 5.6 percent rise in 2022. Europe’s rise, making it the third highest region globally, is expected to result in unprecedented increases on employer-sponsored medical plans, as it surpasses the double-digit barrier.
· Asia-Pacific (APAC) represents the second lowest increase of the five regions. APAC, at 9.7 percent, is a half a point higher than 2023 (9.2 percent).
· North America is something of a paradox. While the 7.6 percent increase is the region’s highest since 8.5 percent in 2014 - and is higher than 2023’s 6.6 percent - it is the smallest increase of any of the global regions. The region, comprised of Canada and the United States, benefitted from comparatively lower general inflation rates.
To get a copy of the report contact Aon.
