Aon plc has published its 2024 Global Medical Trend Rates Report, wherein it found that Canada’s employer medical costs will likely slow to a growth rate of just five per cent, down from 7.5 per cent in 2023.
“The trend rate figures represent the percentage increases in medical plan unit costs - insured and self-insured - that are anticipated to be required to address projected price inflation, technology advances in the medical field, plan utilization patterns and cost shifting from social programs,” they write. “While Canadian medical trend is forecasted to be 2.6 per cent higher than general inflation next year, it will be low compared with the rest of the world, at 10.1 per cent.”
They add that biosimilar drugs have led to cost savings, while employers are also reviewing their spending: “initiatives aimed at reducing or controlling overuse, such as raising deductibles and copays and the use of referrals are expected to play an important role during 2024,” they state.
The top three medical conditions driving medical plan costs in Canada are diabetes, mental health and autoimmune diseases. Globally, medical costs are being driven by cardiovascular disease, cancers and high blood pressure or hypertension.
For plan sponsors interested in reviewing coverage, another survey, this time from Blue Cross of Canada, may be sufficient reason to give some pause. The 2023 Blue Cross Small Business Benefits Study found that when offered a raise or a health benefits plan, 49 per cent of employees would choose benefits. “Surprisingly, over a third, 36 per cent of small business employees surveyed said they would rather have health benefits over a $40,000 raise.” The survey questioned more than 2,000 small business decision makers and employees in Canada.
The Blue Cross survey further found that 80 per cent of would-be employees consider a company’s health benefits plan before accepting a new role, while 73 per cent of those with a plan said they would stay with their current employer, even if offered more money elsewhere.
“According to the study, 76 per cent of employees without health benefits would leave their current job in favour of one with a better health benefits plan, and over 160,000 small businesses in Canada have seen at least one employee resign for a better health benefits plan.”