Average costs for U.S. employers paying for their employees’ health care will rise 6.5 percent in 2023, global professional services firm Aon found Thursday. Costs per employee will be $13,800 versus $13,020 in 2022.
The report uses information from Aon’s Health Value Initiative database, which includes health care costs and benefit plans for nearly 700 US employers. These organizations employ 5.6 million employees and account for $76 billion in healthcare spending in 2022.
The projected 6.5 percent increase in average costs for U.S. employers is more than double the 3 percent increase employers experienced in 2022, the report said. However, the increase was below the 9.1% rise in the consumer price index reported on Thursday by US Bureau of Labor Statistics.
Medical claims were lower at the start of the pandemic as many patients put off care, creating a smaller budget in 2022. But now claims are slowly returning to normal levels for employers and inflation is picking up, the report said.
“In stark contrast to past decades, we measure that healthcare budgets for US employers will be nearly three times lower than the consumer price index this calendar year,” said Debbie Ashford, North America chief actuary for healthcare solutions at Aon . in a news release. “Despite this historic event, employer health care costs are expected to increase by 6.5% in 2023 due to economic inflationary pressures.”
Inflation is typically slow to affect health care because of the multiyear nature of contracts between providers and payers, but it is likely to become more prevalent next year, Ashford added.
To combat rising costs, Aon recommends that employers address the cost burden associated with patients with chronic and complex health conditions. Ashford said it’s “not unusual” for 1 percent of members to drive 40 percent of employers’ health care spending in a given year. Data collection and analysis of these conditions can help sponsors plan to reduce costs.
“The effect of chronic disease has far-reaching implications beyond what we see in health care costs to other areas of business, such as absenteeism and productivity, disability and workers’ compensation,” said Farheen Dam, Aon’s North American healthcare solutions leader. “By focusing on chronic disease, we’re not only improving the health and happiness of employees, we’re also helping to improve the way they live and work.”
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