The cost of employer medical benefits in Canada are forecast to rise 7.5 per cent in 2023, according to the 2023 Global Medical Trend Rates report from Aon plc.
“As employer-sponsored medical plans become an ever-increasing part of an organization’s employee compensation, pressure is growing to accurately forecast and manage future costs,” the firm states in its announcement about the report’s publication. “Employers need to understand the factors driving costs to better navigate volatility and make more informed decisions.” They add that the rates discussed are not meant to represent healthcare costs as a whole.
The global average medical trend rate for 2023 is expected to be 9.2 per cent, the highest trend rate recorded since 2015. In 2022 the global average sat at 7.4 per cent in 2022.
In Canada, the annual medical trend rate was seven per cent in 2022, rising to 7.5 per cent in 2023.
Aon says top medical conditions driving medical plan costs are consistent with a year ago. Top conditions were cardiovascular disease, cancer and high blood pressure and hypertension. They write that it may come as a surprise that COVID-19 did not make the list of top five conditions. “It is important to remember that this report deals with the costs associated with private insurance and that in most locations the cost of COVID treatment, testing and vaccination was covered by governments.”
To mitigate costs, Aon says wellness initiatives are generally a leading strategy. Interestingly, they say that these help to control costs not only by encouraging use of preventative care, but also to reduce the stress that can in turn exacerbate other health conditions.
