This increase is significantly higher than the expected average for 2022, which was 4.4 percent. However, the increase still lags behind inflation, which is currently roughly 9 percent.
“Because health plans typically have multi-year contracts with health care providers, we haven’t felt the full effect of price inflation in health plan cost increases yet,” Sunit Patel, Mercer’s chief actuary for health and benefits, said in an Aug. 11 press release from the company. “Rather it will be phased in over the next few years as contracts come up for renewal and providers negotiate higher reimbursement levels. Employers have a small window to get out in front of sharper increases coming in 2024 from the cumulative effect of current inflationary pressures.”
The expected increase of 5.6 percent is based on changes employers would make to lower costs.
If no changes are made by an employer, Mercer found that benefit cost per employee would increase by 7 percent.
Only 36 percent of respondents to Mercer’s survey said they would cut costs on benefits with higher deductibles or copays for employees.
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