Healthcare costs in the Middle East and Africa (MEA) are rising, with the average annual increases now returning to pre-pandemic levels, according to a new study.

Medical costs per employee in the MEA region increased by 10.2% in 2021 and were expected to rise by 15% in 2022 and 13.8% in 2023, higher than the global average, according to the latest research by Mercer Marsh Benefits.

The increases aren’t just back to the levels seen prior to the pandemic, insurance claims costs have also been impacted by delayed diagnosis of chronic and serious illnesses, noted Mercer.

Mercer had polled 226 insurers across 56 countries to find out more about the top trends shaping the future of employer-provided healthcare.

The study found that amid rising medical costs, 68% of employers globally will continue to make “plan improvements” to support talent needs, while 32% intend to lower coverage.

However, the majority of those in the Middle East (56%) and 44% in Africa intend to reduce coverage to manage costs, Mercer noted.

Mercer’s study found that 47% of insurers in MEA have seen changes in group medical plan claims patterns, including higher costs per claim and more later-state diagnosis as people defer care in the pandemic.

“The findings show that employers will need to carefully balance future plan costs with the importance of healthcare benefits as a talent attraction and engagement tool,” Mercer said.

“The knock-on effects of COVID-19 on cost, coverage, claims and plan management are clear in these findings,” added Julio Garcia-Villalon, Mercer Marsh Benefits Leader in Middle East and Africa.

Mercer recommended that all businesses with healthcare insurance should:

  1. Plan for future inflation-related cost increases, but maintain a balance against the value of health insurance as an attraction and retention tool
  2. Ask insurers in-depth questions about the true extent of their support for mental health conditions
  3. Explore the functionality and quality of digital services offered by insurers and understand how these fit within the benefits portfolio
  4. Promote early health screening and diagnosis for chronic conditions to help manage future claims costs
  5. Be aware of changing insurer requirements related to their underwriting practices (for example, COVID-19 vaccination data) and develop an effective plan to meet them

(Reporting by Cleofe Maceda; editing by Brinda Darasha)