The cost of employer-provided health benefits in Canada is forecasted to rise six per cent in 2020, outpacing general inflation by 1.9 per cent, according to a 2020 trend rates report by Aon.

The increase is due to higher costs from the rising spend on drugs in general, noted a press release. Globally, costs for employer-sponsored medical plans in 2020 are expected to increase eight per cent, up from 7.8 per cent growth this year, according to the report.

“We expect the medical trend rate for 2020 to be similar to last year,” said Greg Durant, Aon’s Canadian chief actuary for health solutions. “However, with the federal election scheduled for October 2019, government subsidization of health care may be impacted as a national pharmacare program is under consideration. . . .

Read: What are the implications of pharmacare reform for private drug plans?

“If the incumbent government remains, we could very well see some changes in this regard, which could result in a positive impact on the 2021 medical trend rate for plan sponsors, as prescription drug costs are the largest single cost driver for medical plans in Canada.”

The report also indicated the leading medical conditions driving health-care claims in Canada are musculoskeletal/back issues, cardiovascular and mental health. It also confirmed the growing prevalence of risks from unhealthy habits, such as physical inactivity, poor nutrition, insufficient sleep and smoking.

“Many of these risk factors lead to chronic conditions with long-term medical costs that make them difficult to treat and result in long-term medical cost increases,” said Tim Nimmer, Aon’s global chief actuary for health solutions. “As a large portion of our waking hours are spent on the job, the workplace is a logical place to create a healthier culture and change behaviours.

“Our goal is to guide employers as they become more critical in helping individuals and their families take a more active role in managing their health, including participating in health and well-being activities and better managing chronic conditions.”

Read: Focus on preventative measures in fight against chronic disease

Copyright © 2019 Transcontinental Media G.P. Originally published on benefitscanada.com

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