Rising insurance claims could lead to higher premiums, tighter underwriting process, or policy exclusions
The costs associated with employer-sponsored medical benefits programs is likely to rise by 15 per cent in India in 2022. This is the highest increase anticipated in the Asia region – and at three times the predicted general rate of inflation in India, according to a report released by Mercer Marsh Benefits.
The MMB Health Trends report surveyed 210 insurers globally, including 74 in Asia, and identified key trends influencing the future of employer-provided medical benefits.
Findings revealed that five countries in Asia experienced higher medical trend rates than the regional average (8.8 per cent) in 2021. India had the highest medical inflation rate of 14 per cent, followed by China, Indonesia, Vietnam, and the Philippines at 12, 10, 10 and nine per cent, respectively.
The report further said that nearly 5.8 million Indians died from non-communicable diseases (NCDs) every year. Cancer caused the maximum deaths, followed by circulatory system and COVID-19 in Asia in 2021. That said, respiratory, gastrointestinal and COVID-19 (34%) were the healthcare conditions that experienced the most frequent claims.
Says Prawal Kalita, Mercer Marsh Benefits Leader, Marsh India: “Rising insurance claims could potentially lead to higher premiums, tighter underwriting practices, or policy exclusions. To address the root cause of rising medical claims and the impact of non-communicable diseases on employees in India, benefit plans need to integrate outpatient department treatments, critical illness coverage, and wellness programs, in order to support colleagues in a more holistic manner.”
Joan Collar, Asia regional leader, Mercer Marsh Benefits added that costs have soared despite lower levels of medical treatment than before the pandemic. “This trend, exacerbated by deferred healthcare treatments has resulted in more adverse outcomes, leading to higher costs. Reducing NCDs remains a key priority for employers for the health of their employees and their business. More than ever, employer-sponsored medical benefits should be viewed as an investment in employees’ wellbeing. Employees who feel their employer cares about their health and well-being are more motivated, productive, committed, and loyal,” she says.
The study further revealed that 33 per cent of insurers were making changes to facilitate more inclusive medical plan designs by allowing coverage for the non-permanent or full-time workforce.
“Employers need to develop a mental health strategy to enhance the overall wellbeing of their employees and refine their benefits strategy accordingly to align it to their diversity, equity, and inclusion goals, and the different needs of their employees. With a sharp rise in the number of employees experiencing burnout and fatigue, this has become a workplace imperative. Employers need to deploy investments and resources to ensure they maintain a mentally resilient workforce,” Collar adds.