AON: Health insurance rates will spike 8.8% in ’21 in LatAm, Caribbean
The costs of company-sponsored medical plans in Latin America and the Caribbean will increase by 8.8% in 2021, exceeding headline inflation by 6.4%, according to its 2021 Global Medical Trends Rate Report by professional services firm Aon plc.
“COVID-19 has demonstrated the need for better global governance regarding the management of medical programs,” said Maricarmen Burgos, executive vice president of Health Solutions for Aon Puerto Rico.
“Multinational employers are still learning how to manage the pandemic and its effects. They are using this experience to better understand and address the health and wellness needs of employees,” she said.
Meanwhile, the report also forecasted that, globally, the costs of employer-sponsored health plans are also expected to increase by 7.2% this year. This is mainly due to the incorporation of new coverage, an increase in average costs for medical services and an anticipated decrease in headline inflation, the firm stated.
Projected medical trend rates vary significantly by region, the study showed. Costs are expected to rise the most in the Middle East/Africa regions, with median trend rates predicted at 12%. By contrast, Europe is projected to see an average increase in the medical premium rate of only 5.5%.
“Despite the pandemic, we expect the high prevalence of employer-sponsored health plans to continue. We have to consider that the scope of the conditions offered by these plans may change, for example, covering new procedures, fewer coverage exclusions and with more flexible requirements,” said Violetta Ostafin, CEO of Health Solutions for Aon Latin America.
Aon’s report confirms the growing impact of noncommunicable diseases on health care costs globally. In Latin America and the Caribbean, cancer, cardiovascular disease, diabetes, hypertension and pulmonary respiratory disorder were the most prevalent health conditions that increased medical costs, the report confirmed.
This report also speaks about the increasing prevalence of risk factors for unhealthy personal habits in Latin America and the Caribbean, such as high blood pressure, poor nutrition, high blood glucose, obesity and high cholesterol.
In response to these risks, wellness strategies have become more relevant in different regions, especially in Latin America, with a prevalence of 88%.
According to the report, the most common programs are at the prevention level, education and detection, and include wellness activities and health coaching. This is accompanied by medium and long-term strategic plans supported by new analytical and digital solutions in wellness.
“There is great uncertainty regarding the impact of COVID-19 on long-term care and treatment,” said Tim Nimmer, Aon’s global chief actuary for Health Solutions.
“While countries are going through different outbreak phases, the use of medical plans is expected to return to normal levels during 2021 as medical services begin to reopen to the market,” Nimmer said.