One in two employees in Asia say they highly value insurance coverage for mental health, yet only 1% of insurers in Asia regard mental health provision as a key priority. The region sees the most inadequate coverage in this area, according to Mercer Marsh Benefits’ (MMB) Health Trends Report which surveyed 210 insurers across 59 countries to examine the top trends shaping the future of employer-provided healthcare.
As the pandemic continues to disrupt day-to-day life globally, access to mental health care is critical for a healthy and productive workforce. Asia insurers continue to lag behind their global counterparts in terms of mental health support. Seven out of ten European and Latin American insurers offer mental health counselling, compared to just one in three (34%) insurers in Asia. Likewise, one in three insurers in Asia (compared to 26% globally) do not provide plans that cover mental health services.
Insurers in Asia also fall behind in mental health coverage for outpatient treatment (36%) and preventative measures (21%), compared with the global average of 43% and 28% respectively.
Joan Collar, Managing Director, Asia Regional Leader, MMB, said: “The pandemic has shown how integral employee mental health is to the success of a business. The insights we’ve gathered suggest that employers may have to continue to advance their corporate mental health and well-being agenda independently of their insurers. Companies should make establishing or reviewing their mental well-being strategy a top priority in 2022. This is an opportunity for
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employers to reinvent their programs, identify gaps, address employee preferences and cover needs across the entire spectrum of mental health conditions.”
Medical trend rates in Asia below pre-pandemic levels
The research found that medical trend rates (the year-over-year cost increase for claims under a medical scheme on a per-person basis) rebounded in 2021 from 2020 lows caused by the pandemic. This trend is expected to continue, with the global 2022 rate forecasted to be 9.5%. In Asia, medical trend rates rebounded from 3.5% in 2020 to 8.8% in 2021, and is expected to hit 10% – four times the equivalent general inflation rate of 2.3% – this year which remains below
pre-pandemic levels. This could be a reflection of uneven utilization patterns, with many people not being able to access medical services due to COVID-19 related restrictions across the region.
Similarly, more than half (53%) of the insurers in Asia reported lower medical claims activity than pre-pandemic levels, in contrast to other regions which observed higher claims activity than before the pandemic. Amid persistent COVID-19 uncertainty in Asia, it is no surprise that close to a third (29%) of the insurers remain cautious about when medical claims will return to normal.
Commenting on the findings, Ms Collar said: “A full return to normal usage of health services will depend on how the pandemic evolves. It’s interesting to note, despite the fact that medical utilization is not at pre-pandemic levels, the cost to support them have unfortunately soared – this is exacerbated by deferred health treatments which unfortunately, may have more adverse outcomes which leads to higher costs. Employers and individuals are advised to run periodic health checks on their benefits and claims experience, to ensure sustainability on their programs so as to avoid surprises.”
COVID-19 impacting claims experience
Globally and in Asia, COVID-19 is now the third highest cause of claims in Asia by both dollar amount (36%) and frequency (34%). However, it may not reflect the true cost as insurers struggled to capture data about a condition that was unknown before 2019.
Insurers identified COVID-19 and emotional or mental risk as top influencers of employer-provided medical plan costs and 4 in 5 surveyed expect to cover inpatient COVID-19 care in 2022. However, almost half of the insurers in Asia (47%) have made changes or are considering invoking pre-existing condition limitations relating to long COVID. One in three (33%) are considering new long COVID exclusions while 11% have already made policy changes to add future pandemic-related exclusions.
“The reluctance of many insurers to take on unknown risks related to long COVID and future pandemic developments means that employers need to review their policies carefully. We expect more developments in this area this year as there could also be some governments and self-regulating bodies who may seek to eliminate them,” said Ms Collar.
Mitigating health risks with prevention and self-care
Non-communicable diseases (NCDs) are the leading cause of mortality globally. In Southeast Asia alone, such diseases account for an estimated 62% of all deaths. The report revealed that cancer (55%), diseases of the circulatory system (43%) and COVID-19 (36%) were top cost drivers of medical claims, while respiratory diseases (47%), gastro- intestinal diseases (36%) and COVID-19 (34%) are healthcare conditions that experienced the most frequent claims.
To combat these chronic diseases, employers can explore how to embed self-care products into benefit plans. One in three insurers in Asia (34%) are considering to cover or provide home testing kits for common conditions, such as blood tests for diabetes, and one in five (18%) now offer, or cover the cost of wearable technology, to help self-manage well-being, up from 9% last year.
Ms Collar added: “HR teams can make a difference by running communication campaigns to educate about the risk of delaying preventive care, listening to employees to better understand what their unmet needs are and exploring opportunities to embed self-care and digital health into benefit plans.”
Health equity in medical plans is a growing priority
Insurers are making changes to facilitate the design of more inclusive medical plans. A third (34%) of insurers in Asia have made changes to ensure there is diversity among the medical providers within their networks, so individuals can choose to see a doctor who shares their ethnic background and gender. At the same time, over half (54%) of insurers are either adding or considering to add eligible expenses that make coverages more inclusive for women.
Ms Collar said: “While insurers play a key role in shaping the benefits landscape, employers have the latitude in designing their benefits to meet their needs. There are many actions an organization can and should take to manage these trends, and the right path will depend on the strategic priorities of the business. These challenges will require employers to look closely at their policies to decide which elements they want to budget for and which exemptions they can and can’t risk.”