Health Trends Shaping Benefits in 2023

As the calendar turns from 2022 to 2023, employers must continue navigating the changing landscape of healthcare.

In the wake of the pandemic, and amid soaring inflation, rising costs, and labor shortages, it’s important for employers to understand their options to develop the best strategy for their 2023 benefits programs.

So what are some of the key trends that will shape employer-provided healthcare in the coming year and beyond?

Mercer Marsh Benefits surveyed 226 insurers across 56 countries for its 2023 Health Trends Survey, which offers some insights.

Per-Person Medical Costs 

As with many sectors, rising costs are an unavoidable fact of business, and it’s important for employers to understand what’s behind those increases when it comes to benefits plans.

MMB researchers found insurers saw medical trend rates return to pre-pandemic levels in 2021, however, many expect those rates to exceed 2019 levels in 2022 and 2023. 

The study suggests some of the factors driving those rates include “increased cost of medical care, increased utilization, and later-stage diagnosis of illness.”

Analysts said the impact of inflation needs to be an important factor in any decision making, along with the affordability of coverage and care. 

As employers plan their 2023 benefits offerings, MMB analysts said the impact of inflation needs to be an important factor in any decision making, along with the affordability of coverage and care for both employers and employees. 

They urge plan sponsors to factor the predicted cost increases into budgets. 

But it shouldn’t just be all about economics. Empathy for employees’ needs should also be taken into consideration.

COVID-19 Impacts Continue

The pandemic has been part of our lives for three years, and while much of our public lives have returned to normal, COVID-19 continues to impact medical insurance claims.

More than half (61%) of insurers who participated in MMB’s survey said claims patterns changed in 2022.

More than half of insurers said claims patterns changed in 2022.

Insurers reported increases in deferred care and diagnosis and 55% saw more later-stage illness diagnoses, with cancer being among the three most frequent causes of claims.

That further drives up costs.

MMB analysts urge employers to consider promoting regular screenings and the importance of early diagnosis.

Plan Modernization

Insurers are also making changes to innovate and modernize the plans they provide. Employers are encouraged to ensure they’re choosing plans that fit their entire workforce.

This includes the increased use of digital tools and services, such as telehealth. 

The MMB survey found half of insurers have changed or expect to change eligibility requirements and eligible expenses to make their coverage more inclusive to the LGBTQ+ community.

Half of insurers have changed or expect to change eligibility requirements and eligible expenses to make their coverage more inclusive.

However, the survey found that changes to reflect shifts in workplace practices, attitudes, and demographics isn’t universal among insurers. 

“Such changes might include incorporating housing, transportation and food into the case management or rehabilitation package, or providing travel benefits that could improve claimants’ overall health or access to treatment,” according to the report.

As employers consider their benefits plans, they should assess whether their programs are inclusive and meet the needs of the entire workforce, from the highest paid to the lowest.

Mental Health Gaps Persist

Mental health is an increasing cause of claim costs for insurers and it’s important for employers to make sure they’re meeting the needs of their employees. 

Mental health conditions were one of the top five causes of claim costs in Europe in 2021 according to the MMB report. It is the first time it has been a top-five issue in any region.

Less than 20% of insurers reported not providing plans that cover mental health services, down from 26% in 2022.

MMB analysts encourage employers to evaluate the coverage they provide for mental health support, and look into how they can fill that gap in other ways.

However, the survey found that many plans exclude mental health care or provide minimal coverage. 

Two-thirds of insurers globally said they cover 10 sessions or fewer for psychological and/or psychiatric counseling sessions.

That number is only about 20% of treatments for people who have one session per week.

MMB analysts encourage employers to evaluate the coverage they provide for mental health support, and look into how they can fill that gap in other ways.

Plan Management

With the uncertainty surrounding the insurance market, analysts highlight the importance of employers and benefits managers to be proactive about their plans and strategies.

One in every five insurers have made changes to their underwriting requirements due to COVID-19, according to the survey. 

Around half of insurers globally told researchers they have not automatically adjusted deductibles (excesses) and co-payments in line with inflation and have no current plans to do so.

Employers need to develop robust strategies that make sure their plans stay in line with inflation and more complex underwriting and plan design challenges. 

“Access to affordable healthcare is a key component to taking Connecticut’s economy to the next level.”

CBIA’s Chris DiPentima

“Access to affordable health care is a key component to taking Connecticut’s economy to the next level,” said CBIA president and CEO Chris DiPentima. 

DiPentima pointed to the common sense solutions in CBIA’s Transform Connecticut policy priorities, which is supported by nearly half of the incoming legislature.

“We need to make it easier for employers to access and provide quality, affordable healthcare for their workers,” DiPentima said.