Survey: Group Health Insurance Costs Surge in 2021 As Elective Procedures Resume

According to a survey released on Monday, health insurance costs for employers increased the most in over a decade this year as Americans resumed non-urgent procedures that had been postponed due to the COVID-19 pandemic.

Source: Reuters | Published on December 15, 2021

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According to Mercer's survey of firms employing approximately 118 million people, the average cost of employer-sponsored health insurance per employee increased 6.3 percent this year to $14,542, the largest increase since 2010.

In 2020, when the pandemic had strained hospital capacity and forced people to postpone elective procedures, the increase was only 3.4 percent.

"I think that's (catch-up care) certainly part of the cost driver," Mercer's Center for Health Innovation Leader Kate Brown told Reuters.

Brown stated that several other factors, such as claims related to the treatment of long-term COVID-19 effects and specialty drug pricing, could be driving the cost increase, which could continue into 2022.

According to the survey, which included 1,745 public and private employers, firms anticipate a "fairly typical" 4.4 percent cost increase next year.

However, the majority of them were unwilling to try to reduce the cost increase as they redoubled their efforts to make physical and mental healthcare more affordable for employees dealing with the stress of the nearly two-year-long pandemic.

Tracy Watts, Mercer's national leader for U.S. health policy, believes that generous health benefits can help companies attract and retain employees in a tight labor market.

According to the survey, adding or expanding programs to increase access to behavioral healthcare was one of the top three priorities for all large employers.

"Throughout the pandemic, it's become very clear that mental health is a critical need for all people, and it's become really more top of mind for most employers over the last two years," Brown said.