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As 2020 approached, U.S. employers generally expected another year of healthcare cost increases of approximately 4-7%, continuing the trend from previous years. COVID-19 dramatically changed these projections as many analysts now predict a net-decrease in costs for 2020. Diminished demand for healthcare services has altered trend projections entirely. This trend will be short-lived as the prognosis for 2021 and beyond is much worse.
These realities will likely significantly impact 2021 budgets and the savings from 2020 will not be sufficient to offset these upcoming cost increases. For 2021 and 2022, the healthcare trend will likely reset at a higher level with higher slope for the foreseeable future. Employers must consider strategies to directly address impacts on healthcare cost and access to care to mitigate long-term effects of the pandemic.