As a health insurance Broker, it can feel tempting to take a step back from day-to-day industry news and updates now that 2021 open enrollment has ended. Today more than ever; however, it is crucial to not lose your footing in the ever-evolving healthcare landscape.
The last two years have continued to prove that knowledge, preparation and resiliency are necessary if Brokers want to help their Groups withstand the rapid pace of change that will continue to unfold within the healthcare industry. We have compiled a list of the most compelling healthcare cost trends and statistics that are projected to affect 2022 open enrollment so you can head into the new year with confidence.
Employer Cost Trends
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There will be a projected 2% increase in health plan costs next year, which is noticeably higher than the 2.1% increase that occurred in 2020. (Willis Towers Watson)
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The majority of Employers are expected to absorb most of 2022’s healthcare cost increases and are not likely to adjust Employees' share of the cost of coverage in 2022. (HRI) Instead, Employers will manage plan costs with both traditional and emerging cost control strategies.
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Increases to medical costs are largely contributed to fallout from the deferral of care that occurred throughout 2020 and 2021. Over 15% of people with employer-sponsored healthcare reported that they had postponed annual check-ups, routine visits for chronic illnesses, lab tests and screenings due to the COVID-19 pandemic. (HRI)
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Large U.S. employers that pay for their Employees' medical care can expect a cost increase of roughly 5% in 2022. This increase will result in an estimated cost of $13,360 per employee. (Aon)
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Many benefits that employers put in place during the pandemic will become permanent. These include expanded telehealth or virtual health offerings, better access to virtual health and new mental health benefits. (Business Group on Health)
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61% of employers that offered additional pandemic-related paid leave to employees expect to scale back on this benefit once the pandemic ends. (Business Group on Health)
Employee Cost Trends
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Employee contributions for premiums increased slightly to $3,331 in 2021, up from $3,269 in 2020. (HRI)
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On average, Employees will cover 22% of their total health plan premium costs in 2022, which is unchanged from 2021 data.
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44% of Employees bought one additional benefit in 2021, with life insurance policies seeing the biggest jump. (Aflac)
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The most popular additional benefits workers purchased since the pandemic:
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Life insurance: 22% of overall workers
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Critical illness insurance: 16% of overall workers
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Mental health resources: 14% of overall workers
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Hospital insurance: 14% of overall workers
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Accident insurance: 12% of overall workers
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Disability insurance: 10% of overall workers
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Cancer insurance: 4% of overall workers
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Carrier Trends
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Carriers plan to utilize technology-based efficiencies like process automation and cloud technology to reduce costs and boost revenue. (PwC)
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48% of health industry executives report that they plan to increase cybersecurity budgets over the next year. (PwC)
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The No Surprises Act, which goes into effect Jan. 1, 2022, will remove consumers from surprise out-of-network emergency care payment disputes between a provider and the payer. The Congressional Budget Office projects that the law will lower premiums by 0.5% to 1%. (PwC)
Behavioral Trends
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The use of virtual-care visits and lower-cost sites of care throughout 2020 and 2021 reduced costly emergency department (ED) utilization.
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Telehealth will play a pivotal role in 2022 as Carriers continue to accelerate the integration of virtual health technology in order to bridge access gaps and provide increased access to medical care and services.
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Even after the pandemic ends, 20% of Employees said they would prefer a virtual relationship with a primary care physician rather than in person. (UnitedHealthcare)
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50% of 1,200 Employers reported that supplemental insurance improves their Employee recruitment, and 60% reported that it also positively impacts their retention. (Aflac)
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As of 2021, one-third of employees feel supplemental insurance is more important now than they did before the COVID-19 pandemic. 51% of workers now view supplemental benefits as an essential component of a comprehensive benefits program. (Aflac)
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Employers anticipate seeing an increase in medical services, late-stage cancer diagnoses, greater numbers of people with long-term mental health and substance use issues and other adverse effects caused by the pandemic. (Business Group on Health)
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The ultimate takeaway heading into 2022 is that both Employers and Employees should prepare for increases in spending for healthcare coverage and ongoing fluctuation as providers adjust to emerging trends and consumer medical needs.
At FormFire, we believe information is power. That is why we prioritize keeping our Brokers up to date on the latest health insurance industry news and trends. If you’re looking for ways to stay informed and better serve your Groups, contact us. Our “all-in-one-place” platform simplifies the enrollment process so you can focus on what matters most: your clients.