Employer-sponsored health benefit costs are set to rise by nearly 7% globally in 2020, with insurers around the world especially concerned about the growing impact of mental health costs, a new report shows.
Analysts at Willis Towers Watson released their global survey on trends in employer health benefits—which polls 296 payers in 79 countries—and project a 6.8% increase in costs globally. In the U.S., health benefit costs are estimated to increase by 7.2%.
The largest increases are projected in Latin America (11.7%), while in Europe health benefit costs are set to rise by 4.3% in 2020. Insurers across the globe expect those increases are here to stay as well, the survey found, with 40% saying they believe health benefit costs will continue to grow at higher rates over the next three years.
“Controlling rising healthcare benefit costs remains a top priority for medical insurers and employers globally,” said Cecil Hemingway, managing director and global co-head of health and benefits at Willis Towers Watson, in a statement.
“Despite the regional variation, cost increases continue to outpace inflation and remain unsustainable, making affordability a challenge for employers and employees alike,” Hemingway said.
Insurers are increasingly concerned about the growing cost impact of mental health conditions, the report found. Twenty-seven percent of the survey respondents said they believe mental health conditions will be among the three types most commonly affecting costs within the next five years.
Cancer, cardiovascular diseases and musculoskeletal conditions are the three categories that most impact costs, according to the survey.
“The potential impact of mental health conditions is getting the attention of insurers and employers worldwide,” said Francis Coleman, managing director of health and benefits, global services and solutions, in a statement. “As the demand for mental health services increases, employers can expect upward pressure on costs and challenges to existing healthcare models."
The survey respondents also ranked several other cost drivers, and 70% said the high cost of technology is a key factor. In addition, 47% blamed providers’ profit motives, and 76% pointed to overutilization caused by providers over-recommending services.
Two-thirds said rising costs may be driven in part by employees seeking out inappropriate care, according to the survey.