Singapore's medical trend rate, which measures medical cost inflation, is projected to remain flat at 9.5% in 2020, lower than what was recorded in 2019.
According to the sixth annual Mercer Marsh Benefits Health Trends: 2020 Insurer Survey, in 2019, insurers in Singapore reported medical care cost increases of 10%, which was 10 times the rate of inflation in the country. In 2020, medical costs are expected to follow the same trajectory of the nation’s inflation rate at -0.2%, softening to 9.5%. This will fall below the 10.7% projected rate across Asia.
Across the 11 Asian markets surveyed, Singapore’s expected medical trend rate for 2020 ranked eigth, while Indonesia (13.8% increase), Malaysia (13.5% increase) and Vietnam (12% increase).
Commenting on this, Neil Narale, Singapore Health Leader at Mercer Marsh Benefits, said cost management would remain a key priority for medical insurers and employers. "While employees can take comfort knowing that the medical trend rate has softened slightly, we expect there to be an increase in outpatient costs as individuals return to care in the second half of this year. We are also expecting a rise in inpatient claims as waiting lists for inpatient treatment are cleared, which will carry on into 2021.
"Importantly, employers will need to balance economics and empathy to provide health programmes that are meaningful, but also maximise return on investment."
Employer-sponsored plans will continue to play an important role
COVID-19 has indeed introduced new challenges for employers, prompting them to now search for benefit providers that can offer additional benefits such as mental health, preventive care, and an enhanced range of digital and online services. As a result, the study noted that insurers are now increasingly looking to broaden their suite of solutions.
In fact, 47% of insurers surveyed in Asia are now offering virtual health consultations/telemedicine, up from 32% in 2019.
Similarly, the same percentage of Asia insurers now cover preventive health initiatives such as screenings, with an additional 22% either experimenting of saying they have developed plans to initiate this within the next 24 months.
Apart from the above, the survey also found that employer-sponsored plans will continue to play an important role in providing health services that people need. In particular, more than half (55%) of insurers expect their employer-sponsored plans to cover COVID-19 vaccinations, while 82% expect to cover COVID-19 in-patient treatments (global average: 69%).
Despite an increase in demand, gaps still remain in mental health support
While mental health has now become more important than ever before, in light of the pandemic, the survey still found existing gaps in support provided in this aspect.
As an example, only one-third of insurers globally currently offer virtual mental health counselling, while 38% in Asia do not provide plans covering mental health services.
At the same time, less than half of insurers in Asia provide coverage for in-patient and outpatient treatment for mental health. This is despite the fact that across all regions, insurers have rated private, employer-sponsored health care systems as more effective than public ones in providing the needed prevention, diagnostics and treatment of mental health disorders.
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