Aon Survey: Health Care Costs Will Continue Double-Digit Increases; HMOs Trend Higher than POS, PPO Plans, According to Major Health Care Providers.

Business Editors/Health & Medical Writers

Companies will continue to face health care cost increases in the double-digits, according to an Aon survey of major health care providers. The forecast, released today, may serve as a call-to-action for companies to more efficiently spend their health care dollars.

Based on data provided by the nation's largest medical, dental, Pharmacy Benefit Manager (PBM) and vision vendors, Aon has found that HMOs (Health Maintenance Organizations) are expected to raise costs, on average, 16.2 percent for 2003 renewals. This marks a continuing shift in the landscape of health care plans - HMOs historically have not shown the increases of other types of plans, such as PPO (Preferred Provider Organizations) and POS (Point Of Service) plans.

"The HMO may still be the best option for some organizations," said Bill Sharon, senior vice president with Aon Consulting. "However, as they are negotiating with carriers, companies need to be certain that they are looking at a variety of options to provide the best and most cost-effective coverage for their employees."

    In brief, the forecast for medical plan increases is as follows:

    HMO: With Prescription drugs (Rx) - 16.2 percent,
         Without Rx - 14.6 percent

    POS: With Rx - 16.0 percent, Without - 14.6 percent

    PPO: With Rx - 16.0 percent, Without - 14.5 percent

    Indemnity: With Rx - 18.3 percent, Without - 17.1 percent.

The Aon study also found that pharmacy plans are expected to rise at a 17.8 percent clip. Dental plans all fall below 10 percent, with Dental HMOs only expected to increase by 4.4 percent. Vision plans are forecast to rise 3.2 percent.

Twice a year, Aon surveys major providers of medical, dental, pharmacy and vision plans. Figures provided by the companies are aggregated and represent national averages as forecast by Aon. Results of specific companies may vary. The study is available at www.aon.com.

About Aon

Aon Corporation (NYSE:AOC) is a holding company that is comprised of a family of insurance brokerage, consulting and underwriting subsidiaries.

Aon Consulting is among the top five global human resources consulting firms, with 2001 revenues of $938 million and 7,400 employees in 140 offices throughout the world. Aon Consulting delivers integrated consulting solutions to help clients with employee benefits, human resources outsourcing, compensation, communication and management consulting.

This press release may contain certain statements relating to future results, which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from either historical or anticipated results, depending on a variety of factors. Potential factors that could impact results include the general economic conditions in different countries around the world, fluctuations in global equity and fixed income markets, changes in commercial property and casualty premium rates, the competitive environment, the actual cost of resolution of contingent liabilities and other loss contingencies, the final execution of the business transformation plan, the ultimate cost and timing of the implementation thereof, the actual cost savings and other benefits resulting therefrom, whether the Company ultimately implements the proposed spin-off of its underwriting operations, rating agency actions, any proposed capital raising and the timing and terms associated therewith, and events surrounding terrorist attacks of September 11, 2001, including the timing and resolution of related insurance and reinsurance issues.