Global Health Benefit Costs to Rise 8.1% in 2022

Employer-sponsored healthcare benefit costs are expected to increase in 2022 at a similarly brisk rate as this year, though growth will vary widely in different regions due to the asymmetric impact of the COVID-19 pandemic, according to Willis Towers Watson.

In its 2022 Global Medical Trends Survey, the consulting firm said costs would rise by a global average of 8.1% for a second straight year in 2022 following a 4.8% decline in 2020.

The survey predicts a 7.6% gain in the United States and marked variation in other regions, including Latin America (14.25), the Middle East and Africa (10.6%), Asia Pacific (7.6%), and Europe (6.7%).

“COVID-19 has produced the biggest impact to global medical trend variation the industry has seen, and we expect the repercussion and volatility from it to extend into 2022 and beyond.” Eric McMurray, global head of health and benefits at Willis Towers, said in a news release.

“The pandemic, combined with the changing face of work, has had a significant effect on medical trends, delivery of services, and the future drivers of medical claims,” he added.

In the U.S., the survey found that the delta surge and vaccine hesitancy have “defined the national landscape” and pharmacy costs continue to be a large contributor to the upward cost trend. “For employers, there is a focus on wellbeing programs with an increase on digital vendors,” Willis Towers reported.

Globally, the pandemic has significantly accelerated the use and uptake of telehealth services. According to the survey, more than half of global insurers now cover telehealth across all of their plans and 37% said that adding new telehealth services was the biggest change to their plan portfolios for 2021.

Cost drivers remain largely unchanged from prior years, from an insurer viewpoint, with the overuse of care due to medical practitioners recommending too many services or overprescribing continuing to be the leading driver of medical costs.

But in a new wrinkle, respondents ranked musculoskeletal disorders, potentially attributable to poor ergonomics in employees’ work-from-home environment, as the top condition by incidence of claims. A year ago, they ranked musculoskeletal disorders as number five.

COVID-19, healthcare costs, telehealth, Willis Towers Watson