Employer-sponsored healthcare insurance costs will rise by 4.3% in 2020 in the UK, a slight increase compared to 2019’s rise of 3.9%. This is according to research by Willis Towers Watson.

The 2020 Global Medical Trends Survey surveyed 296 medical insurers operating in 79 countries between July and September 2019. Costs are expected to grow by 6.8% globally.

Almost half of all respondents (40%) expect medical fees will continue to increase at a higher rate over the next three years.

More than a quarter of insurers (27%) predicted that mental health conditions will be among the three most common conditions affecting expenses within the next five years. Currently, cancer (83%), cardiovascular diseases (55%) and conditions affecting musculoskeletal and connective tissue (46%) are the top three conditions by cost.

Managing director, health and benefits, global services and solutions at Willis Towers Watson, Francis Coleman said: “The potential impact of mental health conditions is getting the attention of insurers and employers worldwide.

“As the demand for mental health services increases, employers can expect upward pressure on costs and challenges to existing health care models,” he added.

Seven in ten respondents (70%) quoted the high cost of medical technology as the main cost-driving factor outside the control of employers and vendors, followed by providers’ profit motives (47%).

Nearly three in four insurers (73%) said that overuse of care due to medical practitioners recommending too many services was the most significant factor driving costs related to employee and provider behaviour. Two-thirds (66%) mentioned overuse of care due to employees seeking inappropriate care as an issue.

Managing director and global co-head of health and benefits at Willis Towers Watson, Cecil Hemingway said: “Controlling rising health care benefit costs remains a top priority for medical insurers and employers globally.

“Despite the regional variation, cost increases continue to outpace inflation and remain unsustainable making affordability a challenge for employers and employees alike,” she added.

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