Global benefits costs are projected to increase by 10.4 per cent in 2025, according to a new survey by WTW.
The survey, which polled nearly 350 insurers, found in North America, costs are projected to rise to 8.7 per cent in 2025, up from 8.1 per cent in 2024. In the U.S., insurers projected a 10.2 per cent increase in 2025, up from 9.3 per cent this year.
Costs are also projected to accelerate in the Asia-Pacific region (from 11.9 per cent in 2024 to 12.3 per cent in 2025), the Middle East and Africa (from 10.4 per cent to 12.1 per cent), while Europe and Latin America will see slight decreases.
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Respondents cited increased utilization of health services, rising pharmacy costs and new medical technologies as the primary drivers of overall medical costs.
Over the next three years, 67 per cent of insurers said they anticipate higher or significantly higher global demand for health-care services, and 64 per cent anticipated higher or significantly higher medical trends globally.
“While recognizing that some factors influencing costs may be out of their control, employers can explore initiatives that may help control costs while boosting the value of their health benefits,” said Courtney Stubblefield, managing director of health and benefits at WTW, in a press release. “These include, but are not limited to, evaluating vendor and digital health solutions that expand well-being resources and reduce unnecessary utilization, as well as reviewing their markets to ensure efficient sourcing of private health-care coverages.”
Read: 58% of global insurers anticipating health benefits cost increases over next 3 years: survey