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U.S. employers expect per-employee health benefit costs to rise by an average of 5.6% in 2023, according to early results from Mercer's National Survey of Employer-Sponsored Health Plans 2022. Although the projected increase is higher than the 4.4% increase projected for this year, it lags the overall inflation rate, which is near 9%.
"Because health plans typically have multi-year contracts with health care providers, we haven't felt the full effect of price inflation in health plan cost increases yet," says Sunit Patel, Mercer's chief actuary for health and benefits. "Rather, it will be phased in over the next few years as contracts come up for renewal and providers negotiate higher reimbursement levels. Employers have a small window to get out in front of sharper increases coming in 2024 from the cumulative effect of current inflationary pressures."
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