News Benefits & Pensions
Employer medical benefit costs expected to grow 7 per cent in 2022: survey

Employer-provided medical benefit costs in Canada are forecasted to rise seven per cent in 2022, outpacing general inflation by five per cent, according to the 2022 Global Medical Trend Rates Report released Oct. 12 by Aon, a leading global professional services firm.

The increase for Canadian employer-sponsored medical plan costs expected next year is due to a combination of higher costs for prescription drugs (including biologic immunomodulators), dental care and paramedical expenses, according to a news release.

“We continue to see a moderate decline in the expected health and dental claims activity in 2021 as a result of COVID-19,” said Joey Raheb, senior vice-president and national leader, growth and client engagement, health solutions, Aon.

“With the assumption that no major subsequent lockdowns will occur, comfort level of members in seeing practitioners returns to normal and medical/dental office safety guidelines becoming more efficient, we expect utilization to return to pre-pandemic levels by the end of 2021 or beginning of 2022. Therefore, we anticipate for 2022 a Medical Trend rate at a seven per cent level, like the anticipated trend reported in the prior year.”

Globally, costs for employer-sponsored medical plans in 2022 are forecasted to increase 7.4 percent. This is mainly due to medical utilization returning to pre-pandemic levels, expanded benefits, higher unit costs for medical services and an increase anticipated in general inflation.

Projected medical trend rates vary significantly by region.

Alongside the global pandemic, Aon’s report confirms the increasing impact of non-communicable diseases on health care costs globally. In Canada autoimmune disease, cancer, cardiovascular, mental health and diabetes were the most prevalent health conditions driving health-care claims, according to the news release.

“Looking ahead to next year, most countries are expecting medical utilization levels to be higher than they observed since the start of the pandemic,” said Ed Cwikla, Aon’s chief global actuary for health solutions.

“Preventive care and outpatient are the medical services that are projected to increase in usage the most next year. Utilization of telehealth services is also expected to increase during 2022, continuing the strong increase observed during the pandemic.”

The Aon survey was conducted among 108 Aon offices, each one representative of a country, that broker, administer, or otherwise advise on employer-sponsored medical plans in each of the countries covered in this report. The survey responses reflect the medical trend expectations of the Aon professionals based on their interactions with clients and carriers represented in the portfolio of the firm’s medical plan business in each country.