Medical benefits set to rise 7.5 per cent in 2023

Report outlines top 5 medical conditions causing increase in costs

Medical benefits set to rise 7.5 per cent in 2023

The costs of employer medical benefits in Canada are set to rise to 7.5 per cent in 2023.

That’s lower compared to the global average Medical Trend Rate for 2023, which is expected to be 9.2 per cent – up from 7.4 per cent in 2022 and the highest since 2015, according to an Aon report.

Volatile economic conditions are one of the major drivers of the rise, said Carl Redondo, global benefits leader at Aon.

"Although there is still a fair amount of uncertainty on how long global inflationary pressures will persist, it is clear from the locations surveyed that the expectation around employer-sponsored medical plans is that the medical trend rates will see a sharp rise in 2023 – and employers need to consider several factors as they maintain the resilience of their workforce."

Top medical conditions

The top five medical conditions causing the increase of cost are:

  1. autoimmune disease
  2. diabetes
  3. mental health
  4. lung disorder/respiratory
  5. cardiovascular

"Over the last two years, the COVID-19 pandemic has impacted health care costs across Canada, with claims slowly returning to pre-pandemic levels during 2022," said Joey Raheb, senior vice president and Canadian national leader for growth and client engagement for Health Solutions at Aon.

"The effects of long COVID-19 and other COVID-19 related illnesses and comorbidities (i.e., mental health) continue to evolve, while the Canadian market remains conservative in its reaction to pricing. Supply chain and rising inflation will also play a substantive role in 2023. We expect a return to typical medical inflation driven by Canadian plan sponsors taking a more preventative and pragmatic approach to managing plan spend in 2023."

Nearly half (48%) of employees in the US had to take time off work to deal with "long COVID," according to a previous report.

And cancer became the top driver of large companies’ healthcare costs in the U.S. — ahead of cardiovascular disease and musculoskeletal conditions, according to the Business Group on Health, according to a report the Business Group on Health released in August 2022.

Globally, the top medical conditions driving medical plan costs, according to Aon’s 2023 Global Medical Trend Rates Report, are: 

  1. cardiovascular
  2. cancer/tumor growth
  3. high blood pressure/hypertension

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