CHICAGO, Oct. 14, 2021 /PRNewswire/ -- Aon plc
predicts costs for large U.S. employers that pay for their
employees' medical care will increase on average 5 percent to more
than $13,000 per employee in 2022.
This cost increase projection would be slightly less than what
employers budgeted this year compared to last, according to Aon
(NYSE: AON), a leading global professional services firm.
Budgeted health care costs for clients increased to an average
of $12,792 per employee in 2021, an
increase of 5.2 percent from 2020. The analysis uses the firm's
Health Value Initiative database, which captures information for
more than 700 U.S. employers representing 5.6 million
employees.
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 percent, while employee premiums from pay checks were
slated to be a more modest 1.2 percent 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
percent of the plan cost, up from 80 percent in 2020. Employees
paid the remainder.
Increase to U.S. Medical Plan Costs from 2020 to 2021
Plan
Cost*
|
2020
|
2021
|
Change from
2020 to 2021
|
Employer
Cost
|
$9,708
|
$10,310
|
+6.2%
|
Employee Premiums
from Paycheck
|
$2,453
|
$2,482
|
+1.2%
|
Total Plan
Cost
|
$12,161
|
$12,792
|
+5.2%
|
"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."
Slight Increase for Employees in 2021
Employees in 2021 are contributing about $4,505 for health care coverage this year, of
which $2,482 is paid in the form of
premiums from pay check and $2,023 is
paid through plan design features such as deductibles, co-pays and
co-insurance.
Employee
Costs*
|
2020
|
2021
|
Change from
2020 to 2021
|
Employee premiums
from paycheck
|
$2,453
|
$2,482
|
+1.2%
|
Employee
out-of-pocket costs
|
$2,013
|
$2,023
|
+0.5%
|
Total Employee
Costs
|
$4,466
|
$4,505
|
+0.9%
|
Projected 2022 Claims Experience and Plan Costs
Medical trends are likely to increase at a moderate rate, though
COVID-19's impact adds some uncertainty for plan sponsors. For
instance, while underlying 2022 trends in the U.S. are projected to
increase around 6.5 percent, (based on Aon's 2022 Global Medical
Trend Rates Report), many of Aon's clients will successfully
manage these costs down using strategies like plan design changes,
vendor oversight and chronic condition management.
Focusing on Chronic Condition Care Management and Cost
Efficiency
"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."
The success of employer benefit cost management goes beyond
competitive design, strong medical networks and negotiated pharmacy
contracts. Condition management solutions and navigation services,
both live and digital, have become an essential part of health
benefits. Managing conditions like musculoskeletal, diabetes and
mental illness remain a priority for plan sponsors. Once
implemented, many employers measure the effectiveness of these new
solutions using Aon's Cost Efficiency Measurement (CEM).
"CEM is powered by machine learning technology and can
rigorously match an employer's own population to a national dataset
with millions of members based on factors such as geography,
demographics and more than 25 different co-morbidities," Cwikla
said. "Quantifiable insights based on actual data can shape better
decisions, helping determine if the implemented solutions are
delivering results above and beyond typical performance or if it's
time to shift the health plan investments elsewhere."
Aon's Health Value Initiative
The historical information and projections shown above were
developed using Aon's Health Value Initiative database, which
captures healthcare costs and benefit designs for more than 700
U.S. employers representing 5.6 million employees and $74 billion in 2021 healthcare spend. The
projections above are developed after taking plan design changes
and vendor negotiations into account. To learn more about Aon's
Health Solutions practice, visit
https://www.aon.com/home/solutions/health.html.
* Based on the weighted average cost of clients participating
in Aon's analysis in both 2020 and 2021.
About Aon
Aon plc (NYSE: AON) exists to shape
decisions for the better — to protect and enrich the lives of
people around the world. Our colleagues provide our clients in over
120 countries with advice and solutions that give them the clarity
and confidence to make better decisions to protect and grow their
business.
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Media Contact
Robert
Elfinger
robert.elfinger@aon.com
+1 312 381 0071
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