US Employer Medical Costs Expected To Increase 5 Percent in 2022

Large US employers will see costs they pay for employee medical care increase an average of 5 percent in 2022 to more than $13,000 per employee, according to Aon plc.

The cost increase would be slightly less than what employers budgeted this year compared to 2020, Aon said.

Aon's analysis is based on the firm's Health Value Initiative database, which captures information for more than 700 US employers representing 5.6 million employees.

Aon noted that health plan costs and medical claims were held down for most employers in 2020 due to the COVID-19 pandemic. During the pandemic, many individuals postponed or skipped care due to quarantines. Employers have anticipated that their medical claims experience will return to more typical levels of growth in 2021 and 2022, Aon said.

"Looking ahead to next year, medical utilization levels are expected to be higher than were observed since the start of the pandemic," Ed Cwikla, Aon's chief global actuary for Health Solutions, said in a statement. "Preventive and outpatient care are the medical services projected to increase the most in 2022. Utilization of telehealth services is also expected to rise, continuing the strong increase observed during the pandemic."

For this year's plan costs, employer costs were budgeted to increase 6.2 percent, while employee premiums from paychecks were set to increase 1.2 percent from 2020, Aon said. Plan costs represent the employer's and employee's combined premiums for medical and prescription drug costs but exclude employee out-of-pocket payments such as deductibles, copays, and coinsurance, according to Aon.

On average, employers subsidize about 81 percent of the plan cost, up from 80 percent in 2020, Aon said, with employees paying the remainder.

"In a tight labor market, employers are willing to absorb most of the health care cost increases," Mr. Cwikla said. "Employers are budgeting higher due to uncertainty and the anticipation of members facing health conditions with increased severity due to unmanaged or undiagnosed chronic conditions, 'long haul' COVID-19 patients, and those with increased mental health needs."