Medical costs could grow between 4 percent and 10 percent for employers in 2021, depending on how the COVID-19 pandemic plays out, according to a report from PwC.
PwC came to this conclusion after conducting 23 interviews from February through May with health industry executives, health benefits experts and health plan actuaries. The leaders' companies represent more than 90 million employer-sponsored large group members.
PwC identified four main factors that are likely to inflate or deflate costs in 2021. The two inflators are an uptick in mental health utilization and new specialty drugs. The two deflators are telehealth services replacing in-person visits and employers increasingly narrowing their provider networks.
"Uncertainty remains about the impacts of COVID-19 and the economic downturn on healthcare spending in 2021," the report said. "The health of the overall population could worsen slightly as individuals delay needed care in the midst of the pandemic, pushing up future healthcare costs. The number of individuals with employer-sponsored insurance is declining, driving down provider revenues that have already taken a hit from COVID-19. Looking beyond spending, COVID-19 and the resulting economic downturn likely will transform aspects of the healthcare system."
View the full report here.