Aon plc says employer-provided medical benefits costs in Canada are forecast to rise seven per cent in 2022, outpacing general inflation by five per cent, according to the firm’s 2022 Global Medical Trend Rates Report

The anticipated increase in plan costs is due to a combination of higher costs for prescription drugs, dental care and paramedical expenses. The firm says it continues to see a moderate decline in health and dental claims activity in 2021 as a result of COVID-19, but adds that it expects utilization to return to pre-pandemic levels by the end of 2021 or in the beginning of 2022.

Globally, they say costs for employer-sponsored medical plans are forecast to increase 7.4 per cent, mainly due to utilization returning to pre-pandemic levels, expanded benefits, higher unit costs for medical services and an increase in general inflation. They add that projected medical trend rates vary significantly by region, with average medical trend rates forecasted to reach 11.1 per cent in the Middle East and Africa regions or just 5.6 per cent in Europe.

The report provides a global overview, regional commentaries, and a summary of plan features in different countries around the world. In looking at top global costs, hospitalization ranks first, followed by clinics and laboratory work and prescription drugs. In Canada, prescription drug costs were noted at the top cost element in this country.   

The survey also examines the quality of claims information available from carriers around the world, the prevalence of certain medical plan features, cost sharing practices affecting premiums and claim outlays, and global wellness and health promotion initiatives.

“We expect continued medical plan cost escalation due to population aging, overall declining health poor lifestyle habits and increased prevalence of chronic conditions, as these continue to be global phenomena that are further exacerbated by the potential long-term health impacts of the deferred treatments and routine checks that resulted from the COVID-19 pandemic,” Aon’s researchers write. “Employers will continue to face the prospect of added organizational costs and employee productivity losses unless the controllable factors contributing to these patterns are effectively addressed.”