For the first time, Aon is also forecasting the rate of increase to be expected for companies using consumer-driven plans, based on input from actuaries at leading healthcare insurers. That type of plan is also expected to see 14.1 percent increase for 2004, but Aon warns that the number "should not be taken out of context."

"It's important to look at overall cost for healthcare programs," said Bill Sharon, senior vice president with Aon Consulting and director of the study. "Our analysis reveals that a company can realize first-year savings of up to 8 percent of their cost if they implement an effective consumer-driven healthcare strategy. So, although consumer-driven plans will likely see the same level of increase as other coverage plans this year, considerable savings will still be recovered by making the switch. It all depends on the financial incentives and the resulting changes in consumers' healthcare consumption."

But short-term savings aside, consumer-driven plans are expected to be an even more attractive model in the years to come, according to Aon.

"Early returns on the impact of consumer-driven plans have been positive. Significant reductions in unnecessary care have been charted. Once the actuaries begin to see these results continue year over year, we predict that this will be reflected in trend rates and future trend lines will drop lower than other plan models," Sharon said.

Additionally, although the pharmacy rate projections are slightly lower than last year, they still come in at 14.4 percent, showing that employers must continue to take a look at how their prescription drug coverage is designed.

Connie Perry, vice president with Aon Consulting and director of the company's national pharmacy practice, said: "As we see employees continue to play a larger role in their own healthcare decisions, use of generic drugs is helping to lower the overall trend line for prescription drug coverage. However, in the months to come, we will see discussions about expensive 'biotech injectable' drugs move to the forefront, so plan design in light of these innovations will be vital."

The role of biotechnology-derived injectable medications, which are used primarily to treat high-cost disease states for which previous treatments may have been either more invasive or unavailable, is important for companies to pay attention to. Current estimates are that only 5 percent of total prescription drug costs are from these drugs, but their cost impact on health plans will become more pronounced as their use increases.

2004 rate projections

These numbers are forecast for health care "costs" as opposed to "premiums." Additionally, these numbers are a forecast for cost before changes to plan design.