In many parts of the world, inflation is reaching levels we haven’t seen in 40 years, we are seeing an impact on employee benefits and Medical Trend Rates globally. In times of volatility, there is a heightened need for employers to focus on maintaining and building a resilient workforce by proactively supporting employees who are facing increased living costs. Learn more in Aon’s “Increasing Inflation: Key Considerations for Employers Looking to Provide Better Support.”
Aon’s Global Medical Trend Rates Report 2023 forecasts a sharp rise in Medical Trend Rates globally in 2023. The global average Medical Trend Rate for 2023 is expected to be 9.2 percent, up from 7.4 percent in 2022 and the highest rate since 2015.
Average costs for U.S. employers that pay for their employees’ health care will increase 6.5 percent to more than $13,800 per employee in 2023. On average, the budgeted health care costs at U.S. employers is $13,020 per employee in 2022. “In what remains a tight labor market, employers are absorbing most of the health care cost increases,” said Debbie Ashford, North America chief actuary for Health Solutions at Aon. “Employers are budgeting higher due to uncertainty and the anticipation that inflationary pressures will increase the cost of health care services.” Learn more about Aon’s projections for U.S employer health care costs here.
To mitigate the toll of inflation and growing medical costs on benefits programs, it’s important for employers to ensure benefit spend is optimized, eliminate duplicate coverage, review utilization of benefits, examine alternative financing solutions and make decisions about benefits with appropriate governance. The Impact of Rising Inflation on Employee Benefits 2022 published by Aon explores the effects of global inflation and can help employers make more-informed decisions as medical plans become a larger part of the total rewards spend. Stay tuned to an upcoming episode of the “On Aon” podcast that dives into these trends and more.