MEA: COVID aftermath and changing workplace needs drive up medical claims costs
Source: Middle East Insurance Review | Apr 2023
The long-term effects of COVID-19 and shifting workplace needs are driving change in healthcare plans, from increased claims costs as a result of delayed diagnoses, to insurers’ digital innovation and inclusivity criteria, said Mercer Marsh Benefits (MMB).
In its latest research, MMB surveyed 226 insurers across 56 countries, including 14 from the Middle East and Africa (MEA), to find out more about the top trends shaping the future of employer-provided healthcare.
The trends include:
- Per-person medical cost increases are back to pre-pandemic levels. Global medical trend rate (the year-over-year cost increase for claims under a medical scheme on a per-person basis) for 2021 was 10.1% (Middle East and Africa: 10.2%). The rate in MEA was expected to increase to 15% in 2022 (Globally: 12.7%) and 13.8% in 2023 (Globally: 12.6%).
- 47% of insurers in MEA have seen changes in group medical plan claims patterns, including higher costs per claim and more later-stage diagnoses due to deferred care in the pandemic.
- Insurers expect employers to balance economics and empathy, as in MEA, 56% said businesses will make medical plan improvements to help employee attraction and retention. Globally, 68% of employers will continue to make plan improvements to support talent needs.
- Globally, insurers believe that less than one-third (32%) of plan sponsors will reduce coverage to manage costs. In MEA, the proportion is 44%.
- Insurer innovation has continued after COVID-19. In MEA, 59% of insurers plan on, or are considering, offering wearable technology for health self-management.
- Mental health is now a major claims risk. In MEA, the mental health gap persists but is improving as only 19% of insurers in MEA offer no support for mental health, compared to 16% globally. Among those that do provide cover, less than half (47%) are supplying communication on mental topics, like how to access crisis support lines.
- Changes to coverage and exclusions need close attention, with one in five insurers globally making changes to medical underwriting requirements due to COVID-19. Nearly one in 10 insurers in MEA are adjusting coverage based on COVID-19 vaccination status. In MEA, 22% are treating long COVID as a pre-existing condition.
MMB leader in MEA Julio Garcia-Villalon said that the knock-on effects of COVID-19 on cost, coverage, claims and plan management are clear in these findings. “Insurers in MEA reported respiratory conditions as the top cause of claim costs in 2021 and one of the three most frequent causes of claims along with diseases of the circulatory system, and endocrine and metabolic diseases. Delayed diagnosis has meant that respiratory conditions and other chronic illnesses are being detected at a later stage when it is more difficult and costly to treat,” he said. M