The costs of employer-provided medical benefits in Canada are anticipated to increase next year, a new report by Aon has suggested.
According to Aon’s “2022 Global Medical Trend Rates Report,” group benefit costs in Canada are forecasted to rise 7.0% in 2022, outpacing general inflation. A combination of higher costs for prescription drugs (including biologic immunomodulators), dental care and paramedical expenses was identified by Aon as the major driver of the cost increase.
“We continue to see a moderate decline in the expected health and dental claims activity in 2021 as a result of COVID-19, said Aon senior vice president and health solutions national leader of growth & client engagement Joey Raheb.
Raheb added that given the assumption that no major subsequent lockdowns will occur, the comfort level of members in seeing practitioners returns to normal, and medical/dental office safety guidelines becoming more efficient, Aon expects benefits utilization to return to pre-pandemic levels by the end of 2021, or the start of 2022.
Aon also noted the top five leading medical conditions in Canada, which are (from highest to lowest): autoimmune disease, cancer, cardiovascular, mental health, and diabetes. The report also listed Canada’s top five leading health risk factors (from highest to lowest) – poor stress management; lack of health screening; physical inactivity; bad nutrition; and ageing.
On a global scale, costs for employer-sponsored medical plans in 2022 are anticipated to increase 7.4%, Aon said in its report. The professional services firm has pointed to medical utilization returning to pre-pandemic levels, expanded benefits, higher unit costs for medical services and an increase anticipated in general inflation as general reasons for the worldwide increase.
“Looking ahead to next year, most countries are expecting medical utilization levels to be higher than they observed since the start of the pandemic,” commented Aon chief global actuary for health solutions Ed Cwikla. “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.”