The costs of employer medical benefits around the globe are forecasted to rise 7.2 per cent in 2021, outpacing general inflation by five per cent, according to a new medical trends report by Aon.

“There is still a significant amount of uncertainty regarding COVID-19’s impact on deferred treatments and long-term health care,” said Tim Nimmer, Aon’s chief global actuary for health solutions, in a press release. “While countries navigate through different outbreak phases, the expectation is that medical plan utilization will return to normal levels during 2021 as medical services begin to reopen to the market.” 

The projected medical trend rates vary significantly by region. In the Middle East and Africa regions, costs are expected to increase the most, with a forecast of 12.2 per cent in 2021. In contrast, Europe is expected to see an average medical trend rate increase of 5.5 per cent, while North America is expected to see a rate of seven per cent.

Read: Canadian health benefits costs expected to grow 6% in 2020: report

To mitigate costs, more employers are turning to well-being programs, such as preventive strategies like physical check-ups, screenings, healthy eating and physical activity promotional programs, to reduce chronic conditions, the report found. Employers are also continuing to use traditional strategies, such as controlling unreasonable plan use, adjusting plan designs, narrowing networks and adding flexible benefits plans to cap overall benefit costs.

“COVID-19 has demonstrated the need for better global governance around the management of medical programs,” said Francois Choquette, executive vice-president and leader of global benefits for Aon. “Multinational employers are still learning how to manage the pandemic and its effects and are using this experience to better understand and address employees’ health care and wellness needs.”

Read: Health-care cost inflation to trend downward in Canada in 2019: report

Copyright © 2020 Transcontinental Media G.P. Originally published on benefitscanada.com

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