Employers' health insurance costs surge in 2021 as elective procedures resume-survey

Dec 13 (Reuters) - Health insurance costs for employers rose the most in over a decade this year as Americans resumed non-urgent procedures delayed earlier due to the COVID-19 pandemic, according to a survey published on Monday.

The survey by benefits company Mercer of firms that employ about 118 million people showed the average cost of employer-sponsored health insurance per employee jumped 6.3% this year to $14,542 - the largest rise since 2010.

The increase was just 3.4% in 2020 when the pandemic had strained hospital capacity and forced people to put off elective procedures.

"I think that's (catch-up care) certainly part of the cost driver," Kate Brown, Mercer's Center for Health Innovation Leader, told Reuters.

Brown said several other factors, including claims related to the treatment of long-term effects of COVID-19 and specialty drug pricing, could also be driving the cost rise and may continue into 2022.

The survey, which included 1,745 public and private employers, showed firms expect a "fairly typical" cost increase of 4.4% next year.

But most of them were unwilling to try to reduce the cost increase as they double down on making physical and mental healthcare more affordable for employees dealing with the stress of the nearly two-year-long pandemic.

Tracy Watts, national leader for U.S. health policy at Mercer, said generous health benefits could help companies in attracting and retaining staff in the tight labor market.

Adding or expanding programs to increase access to behavioral healthcare was among the top three priorities for all large employers, the survey showed.

"It's clearly become very salient throughout the pandemic that mental health is a critical need for all people and it's become really more top of mind for most employers over the last two years," Brown said.

Reporting by Amruta Khandekar; Editing by Aditya Soni

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