While healthcare and prescription drug costs continue increasing at double-digit rates, there may be some relief in sight, according to Aon Consulting, a leading global human capital consulting firm.

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Aon Consulting surveyed more than 70 leading healthcare insurers and found prescription drug costs are projected to increase by 11.8 percent during the next 12 months, compared to increases of 12.9 percent for HMOs, and 13 percent for both POS and PPO plans during that same time period. This represents the first time the general pharmacy trend rate is expected to be lower than the medical trend rate since Aon Consulting began conducting this survey in 2001. What's more, this projected prescription drug increase is more than a percentage point lower than last year, when drug costs increased by 13.1 percent.

"Prescription drug rates are expected to increase at a lower rate than in the past due to a number of factors," said Bill Sharon, senior vice president with Aon Consulting and director of the study. "First, companies are successfully implementing three-tiered co-pay plan designs that are increasing employee use of less expensive generic drugs. Second, many prescription medications are expected to come off of patent, which will make them available through less expensive means, such as generics and over-the-counter medications. Finally, companies are using consumer-driven health plans and similar strategies to encourage employees to be more savvy consumers of prescription drugs."

Meanwhile, specialty drug costs are expected to increase at a significant rate. (Specialty drugs are biotechnology-derived injectable medications used primarily to treat high-cost disease states for which previous treatments were more invasive or unavailable.) These drug costs are projected to increase by 19 percent during the next 12 months.

As for retiree medical, experts say that many employer plans will save money in 2006, due to the impact of Medicare Part D legislation. However, the Aon Consulting study shows that future cost increases for retiree medical are projected at double-digit rates (12.9 percent for Medicare Supplement and 11.8 percent for Medicare Advantage), similar to active employees.

"An employer that offers its Medicare-eligible participants prescription drug coverage will likely save money either through a subsidy payment of approximately $600 to $700 per retiree, or lower premium rates in Medicare Advantage HMOs," said Jonathan Nemeth, senior vice president with Aon Consulting. "While employers will gain from this reduced baseline cost for years to come, double-digit increases for retiree medical are expected to continue."

In addition, this study shows the cost for consumer-driven health plans is expected to increase by 13.3 percent, which is on par with HMOs, and POS and PPO plans. Experts expect to see improved CDH trend rates in the future, as consumers change their health care purchasing behavior and more data becomes available.

"Although we are seeing consumer-driven health plans produce very positive results, with immediate and long-term savings, it may take another year or two for healthcare insurers to feel as though they can introduce better trend rates," said Sharon. "The fact is that healthcare costs will continue to be the fastest growing expense for most companies. As a result, initiatives such as consumer-driven healthcare, health promotion plans and disease management programs should all be viewed as viable options in managing healthcare costs."

The following table summarizes Aon Consulting Health Care Trend Survey results from 2001 - 2005:

                   Fall Spring Fall Spring Fall Spring Fall Spring Fall
                   2001  2002  2002  2003  2003  2004  2004  2005  2005
   Medical (w/Rx)
     HMO           14.4% 16.2% 15.1% 16.4% 14.8% 14.1% 13.3% 13.2% 12.9%
     POS           15.7% 16.0% 15.1% 16.1% 14.8% 14.1% 13.6% 13.0% 13.0%
     PPO           16.8% 16.0% 15.8% 15.7% 14.9% 14.2% 13.6% 13.0% 13.0%
     Indemnity     19.2% 18.3% 18.1% 17.2% 16.3% 15.3% 15.4% 14.6% 14.2%
     CDH                                         14.1% 13.7% 12.7% 13.3%
   Medical (w/o Rx)
     HMO           12.7% 14.6% 14.0% 14.7% 13.7% 13.4% 12.7% 12.9% 12.7%
     POS           14.0% 14.5% 13.9% 14.5% 14.0% 13.5% 13.2% 12.7% 12.8%
     PPO           15.1% 14.6% 14.6% 14.4% 14.3% 13.5% 13.2% 12.7% 12.8%
     Indemnity     18.6% 17.1% 17.2% 16.4% 15.5% 14.7% 15.1% 14.6% 14.3%
     CDHP                                        13.3% 13.1% 12.4% 13.2%
   Dental
     DHMO           4.4%  4.4%  5.3%  4.8%  5.1%  5.0%  4.3%  4.7%  4.8%
     PPO            7.7%  7.6%  7.8%  7.6%  7.7%  7.3%  7.0%  7.1%  7.1%
     Indemnity      8.0%  8.4%  8.3%  7.6%  7.6%  7.7%  7.4%  7.6%  7.6%
   Pharmacy
     General       16.0% 17.8% 18.3% 17.7% 15.3% 14.4% 13.1% 13.1% 11.8%
     Specialty                                               22.5% 19.0%
   Vision
                    N/A   3.2%  3.5%  3.8%  3.4%  3.9%  3.3%  3.9%  4.0%


  About Aon

Aon Corporation (NYSE: AOC) ( http://www.aon.com/ ) is a leading provider of risk management services, insurance and reinsurance brokerage, human capital and management consulting, and specialty insurance underwriting. There are 47,000 employees working in Aon's 500 offices in more than 120 countries. Backed by broad resources, industry knowledge and technical expertise, Aon professionals help a wide range of clients develop effective risk management and workforce productivity solutions.

Aon Consulting is among the top global human resources consulting firms, with 2004 revenues of $1.247 billion and 7,000 professionals in 120 offices throughout the world. Aon Consulting delivers integrated consulting solutions to help clients with employee benefits, human resources outsourcing, compensation, communication and management consulting.

  For more information, contact:
  Joe Micucci, Aon Consulting, 312-381-4786, joe_micucci@aon.com.

This press release contains certain statements related to future results, or states our intentions, beliefs and expectations or predictions for the future 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: general economic conditions in different countries in which we do business around the world, changes in global equity and fixed income markets that could affect the return on invested assets, fluctuations in exchange and interest rates that could influence revenue and expense, rating agency actions that could affect our ability to borrow funds, funding of our various pension plans, changes in the competitive environment, our ability to implement restructuring initiatives and other initiatives intended to yield cost savings, our ability to implement the stock repurchase program, changes in commercial property and casualty markets and commercial premium rates that could impact revenues, changes in revenues and earnings due to the elimination of contingent commissions, other uncertainties surrounding a new compensation model, the impact of investigations brought by state attorneys general, state insurance regulators, federal prosecutors, and federal regulators, the impact of class actions and individual lawsuits including client class actions, securities class actions, derivative actions, and ERISA class actions, the cost of resolution of other contingent liabilities and loss contingencies, and the difference in ultimate paid claims in our underwriting companies from actuarial estimates. Further information concerning the Company and its business, including factors that potentially could materially affect the Company's financial results, is contained in the Company's filings with the Securities and Exchange Commission.

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SOURCE: Aon Corporation

CONTACT: Joe Micucci of Aon Consulting, +1-312-381-4786,
joe_micucci@aon.com

Web site: http://www.aon.com/