Damien Kelly
Damien Kelly

Client Director, People Risk


  • 2020 and 2021 have been unprecedented years, with a widespread reported decrease in employer-sponsored medical plan utilisation as a result of the COVID-19 pandemic and lockdown measures.
  • Consequently, 2021 observed the lowest anticipated global medical trend rate ever recorded.
  • However, we will continue to see medical costs rising significantly above general inflation, with the 2022 global net medical trend rate expected at the same level as 2021 reported projections.
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Continued medical plan cost escalation due to population ageing, overall declining health, poor lifestyle habits and increased prevalence of chronic conditions, are anticipated as these continue to be global phenomena that are further exacerbated by the potential long-term health impacts of the deferred treatments and routine checks, that resulted from the pandemic.

Employers will continue to face the prospect of added organisational costs and employee productivity losses, unless the contributing factors are addressed. The optimisation of medical plan design, financial strategy, and delivery mechanisms are a good place for employers to start in addressing these challenges. The structural solution for the long term involves providing robust health care and wellness benefits for all employees and their families, which can actively promote a healthy workforce.

Although this report is not targeted to address wellbeing, the summaries on global practices should be useful in understanding wellness, as well as employer-sponsored medical plans and correspondent cost mitigation efforts.

Underlying causes of illness and medical risk factors vary greatly by region, country and company sector.

In Australia, COVID-19 did not have a notable detrimental impact on the overall healthcare system. The backlog of cancelled elective surgeries due to stringent lockdowns and the delaying of health screening is expected to generate a future surge of patients resulting in a negative impact on healthcare costs. Combined with an aging population and increasing rates of chronic disease and high cost of medical devices and advancements in technology (cost of prostheses are around 30% higher than NZ) this has resulted in a 3.2% projected medical trend rate for 2022.

Aon conducts the Global Medical Trend Rates annual survey in order to help organisations to budget premium costs for medical plan renewals, understand the factors driving medical cost increases and to devise wellness and cost-containment initiatives to respond to the challenges. For the full survey results, please download the global report.

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