Employers need comprehensive strategies to address rising medical claims costs and coverage gaps, according to Mercer Marsh Benefits’ Health Trends Report
LONDON, 6 December 2024 — Leading health and benefits consultancy Mercer Marsh Benefits, which combines the expertise of Marsh McLennan’s businesses Mercer and Marsh, has released its 2025 Health Trends Report, which surveyed 225 insurers across 55 markets, revealing critical insights into the trends shaping employer-provided health benefits.
The report highlights that while the medical conditions driving claims have remained largely consistent over the last decade, the financial impact of these claims is increasing. Insurers in nearly all markets project medical claim costs to increase by more than 10% this year and next, driven by factors such as medical inflation, utilization changes and changes to treatment mixes.
Hervé Balzano, Mercer’s Health President and Mercer Marsh Benefits’ Global Leader, commented: “As costs continue to increase, it will be critical for organizations to invest in plan improvements that help them manage costs while delivering healthcare coverage that serves their entire workforce. When employers invest in wellbeing, their employees are healthier and more productive.”
The report found that cancer continues to significantly impact employee health and claims costs, with 82% of insurers citing an increase in the incidence of cancer treatment claims over the last five years for employees under 50. Also, metabolic and cardiovascular risk factors are contributing to many employee health conditions, significantly driving costs for employer-sponsored health plans. As treatments for these conditions continue to evolve, they are becoming more expensive.
This means that employers must look beyond their standard cost containment strategies to keep healthcare affordable for themselves and their employees. According to Mercer Marsh Benefits’ People Risk report, just 31% of HR and risk managers have effective cost containment strategies to manage benefit costs.
Amy Laverock, Mercer Marsh Benefits’ Global Advisory Leader, commented: “Employers have many options to help keep healthcare benefits affordable, from working with vendors on packaged fees and bundled pricing to negotiating alternative funding, such as self-insurance. They can also increase accessibility by conducting insurer reviews to make effective use of digital health and healthcare centers of excellence.”
There continues to be entrenched coverage gaps between services insurers typically cover and the holistic health and well-being needs of a diverse workforce. Notably, 31% of insurers globally do not provide coverage and/or assistance to diagnose and manage neurodiverse conditions. Coverage for reproductive health benefits also remains limited.
Encouragingly, mental health support is available within most healthcare plans, with 88% of insurers globally offering coverage for counseling, either by default or by request. However, the number of counseling sessions covered per plan year appears to be declining, potentially due to inflationary pressures and benefit caps on mental health coverage.
Looking ahead, insurers anticipate that half of employers will seek to reduce plan coverage in the coming year as a strategy to manage costs, highlighting the pressing need for comprehensive and sustainable solutions at a time when the healthcare sector is strained.