Medical Plan Costs Expected to See Bigger Rise in 2023

mployers in the U.S. expect medical plan costs per employee to rise 5.6 percent on average in 2023, HR consultancy Mercer reported. While significantly higher than the premium increase of 4.4 percent expected for 2022, the 2023 increase lags overall inflation, which is currently running at about 8.5 percent year over year.

The cost-increase forecast is based on the first 864 employers with 50 or more employees responding, through Aug. 4., to Mercer's National Survey of Employer-Sponsored Health Plans. The survey launched June 22 and remains open, with a final report expected this fall.

"Because health plans typically have multiyear contracts with health care providers, we haven't felt the full effect of price inflation in health plan cost increases yet," said Sunit Patel, Mercer's chief actuary for health and benefits.

The effect of higher health care prices on plan costs "will be phased in over the next few years as contracts come up for renewal and providers negotiate higher reimbursement levels," he said. "Employers have a small window to get out in front of sharper increases coming in 2024 from the cumulative effect of current inflationary pressures."