Disruption to the delivery of healthcare and lasting changes to work patterns resulting from the coronavirus pandemic will have a major impact on both the cost and design of employer-provided health benefits, said Mercer Marsh Benefits recently when releasing a new report.
The sixth annual, MMB Health Trends: 2020 Insurer Survey indicates that 68% of insurers expect increased medical claims driven by COVID-19 diagnostics, care and treatment.
The report focuses on employer-sponsored health programs in 59 countries and provided between early June and mid-July 2020, according to the company.
In addition, insurers expect increases in medical costs to continue to vastly outstrip inflation in 2021.
In 2020, they expect a rise in medical costs of 9.5%, which is roughly 3.5 times the inflation rate, compared to the expectation of a cost increase of 9.7% which was three times the rate of inflation, according to the report.
For 2021, 90% of insurers expect the trend to sustain or increase, survey results indicate.
“With an expected rebound in elective treatments deferred during lockdown, a rise in negative health issues related to remote working and sedentary lifestyle, including musculoskeletal and mental health issues, and ongoing concerns about the long-term physical and mental health implications of COVID-19, we expect medical costs to continue to increase,” Hervé Balzano, President, Health at Mercer and Mercer Marsh Benefits International Leader pointed out.
To meet the new challenges posed by remote working and contain expanding costs, companies need to radically rethink the range of benefits they offer their employees and the way in which they deliver them, he advised.
Demand for virtual health consultations
The survey also found an increase in the number of insurers offering virtual health consultations, or “telemedicine”, with 59% saying it was an active part of their current approach to plan management, up from 38% in 2019, according to the company.
In addition, 55% of insurers now cover preventive health initiatives, such as screenings, with an additional 20% indicating they are experimenting or have developed plans to initiate this within the next 24 months.
The need for more mental health support
The survey also found remaining gaps in mental health support, despite the increase in demand seen during the pandemic.
For example, virtual mental health counselling is still not widespread, with only one-third of insurers offering it globally while 32% of insurers do not provide plans covering any mental health services, said Mercer Marsh Benefits.
This is despite the fact that in all regions, insurers rate private, employer-sponsored health care systems as more effective than public ones in providing the needed prevention, diagnostics and treatment of mental health disorders, the firm added.
As medical costs rise and recession looms, it’s important for more companies to focus on ensuring that the benefits they provide improve the health, well-being, productivity and engagement of their employees, said Amy Laverock, MMB’s Advice and Solutions Leader.
“Workforce health is a critical asset to firms, helping them to drive business performance and manage people risk effectively,” she advised. “Health plans should be looked at as an investment in people, not just a necessary cost.”