Employer-sponsored health care benefit costs are expected to increase by more than 8% around the globe next year, a survey of medical insurers by Willis Towers Watson (WTW) has found.
The polling of 287 leading medical insurers in 76 countries suggests that health care benefit costs will increase by 8.2% in 2021, up from a 5.9% rise this year and 7.2% increase in 2019.
This ranges from growth of 5.8% in Europe, to 13.6% in Latin America, while employer health care cost increases in the US are expected to remain stable at 7.3% next year.
In the UK, the cost of private medical insurance continues to edge upward, despite the impact of COVID-19, from an increase of 5.7% in 2019, to 6.3% in 2020 and an anticipated rise of 6.5% in 2021.
Contributing factors include a maturing insured demographic and ageing workforce, along with high-cost and more widely-available treatments such as new generation cancer drug therapies.
Kevin Newman, managing director of WTW’s UK health and benefits business, said that COVID-19 sparked a sharp decline in non-urgent surgeries and elective care in 2020, but that this is likely to be short-lived.
“We expect to see significant volatility in 2021 results, which are dependent on the impact of COVID-19 and whether or not a vaccine becomes available early in the year, who pays for it and the extent of its availability,” he continued.
“In addition, there is uncertainty about how COVID-19 testing and treatment costs for 2021 will continue to be split between government, insurers and employers.”
Cancer, cardiovascular diseases, and conditions affecting musculoskeletal and connective tissue are the top three conditions currently affecting medical costs, but about four in 10 survey respondents predict mental health conditions to be among the top three within the next 18 months.
When asked for the most significant cost-driving factors outside the control of employers and vendors, the high cost of medical technology, providers’ profit motives, and epidemics and global pandemics were the top three responses.
“Further uncertainty around medical trend lies ahead as we start to see the true impact of delayed treatment in 2020 and the long-term effects on those who contracted COVID-19,” Newman said.
“Nevertheless, there is a silver lining as COVID-19 has greatly accelerated the adoption and use of telehealth, which could help to offset those potential higher costs and provide a more efficient way for insureds to access and use healthcare in the future. However, it may also boost utilisation due to ease of access.”
Image credit: iStock
Author: Chris Seekings