Global health benefit costs to rise 7.4 percent as medical utilization returns to pre-pandemic levels
Toronto, ON (Oct. 12, 2021) – Employer-provided medical benefit costs in Canada are forecasted to rise 7.0 percent in 2022, outpacing general inflation by 5.0 percent, according to the 2022 Global Medical Trend Rates Report released by Aon plc, a leading global professional services firm.
The increase for Canadian employer-sponsored medical plan costs expected next year is due to a combination of higher costs for prescription drugs (including biologic immunomodulators), dental care and paramedical expenses.
“We continue to see a moderate decline in the expected health and dental claims activity in 2021 as a result of COVID-19, said Joey Raheb, Senior Vice President and National Leader Growth & Client Engagement, Health Solutions, Aon. With the assumption that no major subsequent lockdowns will occur, comfort level of members in seeing practitioners returns to normal and medical/dental office safety guidelines becoming more efficient, we expect utilization to return to pre-pandemic levels by the end of 2021 or beginning of 2022. Therefore, we anticipate for 2022 a Medical Trend rate at a 7% level, like the anticipated trend reported in the prior year.”
Globally, costs for employer-sponsored medical plans in 2022 are forecasted to increase 7.4 percent. This is mainly due to medical utilization returning to pre-pandemic levels, expanded benefits, higher unit costs for medical services and an increase anticipated in general inflation.
Projected medical trend rates vary significantly by region. Costs are expected to increase the most in Middle East/Africa regions, with average medical trend rates forecasted at 11.1 percent. In contrast, Europe is projected to see an average medical premium rate increase of 5.6 percent. In Canada, the forecasted health care benefit cost growth is 7.0% in 2021 and 7.0% again in 2022.
Alongside the global pandemic, Aon’s report confirms the increasing impact of non-communicable diseases on health care costs globally. In Canada autoimmune disease, cancer, cardiovascular, mental health and diabetes were the most prevalent health conditions driving health care claims.
Aon’s report also confirms the growing prevalence of risk factors from unhealthy personal habits in Canada, such as poor stress management, lack of health screening, physical inactivity, bad nutrition and ageing.
“Looking ahead to next year, most countries are expecting medical utilization levels to be higher than they observed since the start of the pandemic,” said Ed Cwikla, Aon’s chief global actuary for Health Solutions. “Preventive care and outpatient are the medical services that are projected to increase in usage the most next year. Utilization of telehealth services is also expected to increase during 2022, continuing the strong increase observed during the pandemic.”
To view the report, click here.
The survey was conducted among 108 Aon offices, each one representative of a country, that broker, administer, or otherwise advise on employer-sponsored medical plans in each of the countries covered in this report. The survey responses reflect the medical trend expectations of the Aon professionals based on their interactions with clients and carriers represented in the portfolio of the firm’s medical plan business in each country.
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SOURCE: Aon plcTags: Aon, benefits, health care, outlook / predictions, survey