Re/insurance broker Aon has predicted that costs for large US employers that pay for their employees’ medical care will increase on average 5% to more than $13,000 per employee in 2022.
Aon notes that employer health plan costs and medical claims were suppressed for most employers in 2020 due to the COVID-19 pandemic, during which time a lot of care was postponed or skipped during quarantines.
Employers have been anticipating that the medical claims experience will return to more typical levels of growth in 2021 and 2022.
“Looking ahead to next year, medical utilization levels are expected to be higher than were observed since the start of the pandemic,” said Ed Cwikla, Aon’s chief global actuary for Health Solutions.
“Preventive and outpatient care are the medical services projected to increase the most in 2022. Utilization of telehealth services is also expected to rise, continuing the strong increase observed during the pandemic.”
In terms of 2021 plan costs, employer costs were budgeted to increase 6.2%, while employee premiums from pay checks were slated to be a more modest 1.2%increase from 2020.
Plan costs represent the employer’s and employee’s combined premiums for medical and prescription drug costs but exclude employee out-of-pocket payments such as deductibles, co-pays and co-insurance.
On average, employers subsidize about 81% of the plan cost, up from 80% in 2020, with employees paying the remainder.
“In a tight labor market, employers are willing to absorb most of the health care cost increases,” Cwikla said. “Employers are budgeting higher due to uncertainty and the anticipation of members facing health conditions with increased severity due to unmanaged or undiagnosed chronic conditions, ‘long haul’ COVID-19 patients and those with increased mental health needs.”
Medical trends are likely to increase at a moderate rate, though COVID-19’s impact adds some uncertainty for plan sponsors.
But Aon notes that many of its clients will seek to manage these costs down using strategies like plan design changes, vendor oversight and chronic condition management.
“Employers will look to manage plan costs with both traditional and emerging cost containment strategies,” said Will Sneden, U.S. practice leader for Health Solutions.
“For example, virtual care now goes beyond a quick visit for flu symptoms or prescription refills. It now expands to primary and specialty care, with emotional health and women’s health services. It also is providing greater access to new providers and medical tests, helping to build a more resilient workforce.”
