The COVID-19 pandemic has seen organisations embracing workforce well-being as a key initiative in order to navigate through difficult times and thrive in the new norm. This has led to higher spending on employee healthcare during the pandemic.
As a result, across Asia including India, the medical cost is expected to show an increase along with the potential increase in healthcare utilisation and healthcare spending in 2022. This can be attributed to the ongoing COVID-19 treatment or medical care, long COVID/post-COVID complications, deferred treatments deteriorating health profiles due to lifestyle diseases, mental health issues, etc. This would significantly impact employers from a cost perspective if not managed appropriately through cost mitigation measures.
According to a report released recently, by Mercer Marsh Benefits (MMB), insurers expect the costs associated with employer-sponsored medical benefits programs in India to rise by 15% in 2022, which is the highest increase anticipated in the Asia region. During the recently concluded renewal season, we have seen group medical insurance premiums go up by 15-18% on an average in India.
In addition to the COVID-induced demand for healthcare services, the insurance industry has seen record claims during this period due to COVID-related hospitalisations and death. Rising insurance claims have also led to higher premiums, tighter underwriting practices, or policy exclusions.
Emerging health risk trends post-COVID-19
As per MMB Health Trends Report 2022, COVID-19 is impacting claims experience and the insurers identified emotional, mental health risk as a top influencer of the employer-provided medical plan cost. Two-thirds of insurers expect to cover COVID-19 care in 2022 which should take into consideration coverage for long COVID, deferred treatment, mental health etc.
Globally 33% of insurers provide or cover virtual mental health counselling. The trend is similar in India, with mental wellbeing and counselling support emerging as a key value proposition for employees as depicted in the MMB Health on-demand India survey 2021, where 60% of employees rate this as “highly” or “extremely” valuable.
Non-communicable diseases or NCDs have also emerged as one of the top concerns for insurers, which include primarily metabolic and cardiovascular risk, along with cancer and circulatory diseases, which calls for preventive & self-care (lifestyle and condition management).
In India, nearly 5.8 million die from non-communicable diseases (NCDs) every year. The report reveals that cancer (55%), diseases of the circulatory system (43%), and COVID-19 (36%) were the top cost drivers of medical claims in Asia in 2021, while respiratory diseases (47%), gastrointestinal diseases (36%) and COVID-19 (34%) are healthcare conditions that experienced the most frequent claims.
Preventive healthcare and digital health
We are also witnessing employees embracing preventive healthcare (health checks, health risk assessments, vaccinations etc) and self-care solutions to mitigate future health risks.
Self-care solutions include wearable technology to manage well-being, home test kits for common conditions, and application-based devices to help self-manage health conditions. Self-care solutions are highly valued by employees with nearly 60% of employees finding home test kits and wearables to manage conditions like diabetes and heart conditions extremely valuable.
Digital health from primary and preventive care is also highly valued by employees and a number of Indian corporates have introduced teleconsultation since the inception of pandemic. Globally too it’s a similar trend with nearly 70% of insurers now offering or covering telemedicine services for simple health issues like colds, cough and 61% of insurers provide video, telephone, or text access for the treatment of significant issues such as diabetes.
We believe flexibility and choices will be core when it comes to benefits, and policies going forward. Employee value propositions with integrated, holistic, and customised health and wellbeing programs which are not limited to physical well-being, but also mental, social, and financial well-being are gaining momentum with progressive employers.
Employee well-being is increasingly becoming a compelling value proposition post pandemic, companies are now cognizant of their needs and are working to provide employees a holistic wellness experience to enable them to work efficiently. It is pivotal for employers to come up with effective employee benefit programs and initiatives that are in harmony with their life goals. Setting up a well organised employee enrichment infrastructure, will not only benefit the employees but also employers to acquire sustainable talent.