5 Trends Shaping NGO Insurance in 2024
As 2023 draws to a close, the Allegiant Global Partners team has been looking back on the major insurance trends that impacted international NGOs and U.S. non-profits this year. To help your organization prepare for 2024, we’ve taken a deep dive into five of the most important trends presently shaping the insurance ecosystem in the U.S. and around the globe.
Increased emphasis on benefit equity
Though the quest for true benefit equity is light years beyond where it was four years ago, there is still a long way to go to ensure global employee populations are receiving the same degree of care as U.S. local employees.
Our latest white paper, “How Technology is Transforming International NGO Insurance Equity,” touches on some of the challenges facing local national (LN) employees. The good news is solutions are emerging — however, there remains a lot of work left to be done in emerging markets around the world.
A study by the American Journal of Health Promotion declared, “employers’ perception on benefits as a cost to be managed, rather than an opportunity for strategic investment in workforce human capital, has resulted in cost-shifting to employees.” For too long, this has been the dominating opinion on benefit equity. But we are optimistic that times are changing, and more employers will begin prioritizing investment in equitable benefits for all employees — regardless of their geographic location, status, or demographics — in 2024 and beyond.”
Women are paying more for insurance in the U.S.
Benefit inequity has had a notable impact on international employees, but U.S. employees are not immune. A recent report from Deloitte found that employed women in the U.S. are spending $15 billion more than men in out-of-pocket healthcare expenses. The costs associated with pregnancy and childbirth aren’t the culprit, either. Deloitte reports, “On average, female employees under single coverage incur approximately $266 more in annual out-of-pocket costs than their male counterparts, constituting over an 18% increase, excluding pregnancy-related expenses.”
This inequity is due to a number of factors. Deloitte found, “Men are generally more than twice as likely as women to wait more than two years between visits to see a health care professional. And when they do seek care, men more often have fewer services: 46% of men in the study have less than $1,000 in claims annually compared to 35% for women.”
Anecdotally, we’ve also found women spend more time thinking holistically about healthcare needs — and are targeted for more office visits and treatments — than men. As a result, women “generally encounter medical services that surpass the typical deductible, leading to higher out-of-pocket payments.” The Deloitte report also noted women “tend to reach their out-of-pocket maximums more frequently” due to “this divergence in health care utilization patterns, including early age recommendations for annual checkups, high frequency of gynecological examinations, the relatively high cost of breast cancer imaging compared to other types of cancer, and the effects of menopausal transitions, among various others.”
An example of this cost/benefit discrepancy in action is fertility treatment. Men’s fertility issues are diagnosed with minimal costs and at any point in their lives. Whereas women often incur exorbitant expenses for diagnosis and treatment. Same-sex couples face even greater systemic bias and associated expenses. Fertility benefits only kick in after a couple has tried to conceive naturally for three months. Heterosexual couples can be taken at their word — but same-sex couples must prove they’ve used fertility services, which means they are spending disproportionally more before receiving fertility benefits.
To fight back against this troubling inequity, we strongly encourage employers to closely examine their benefit plans and take measures to ensure women — and gender non-conforming individuals — are not incurring excessive expenses for the healthcare they need.
The insurance implications of worsening mental health
Of the many long-term effects associated with COVID-19, one of the most persistent is the toll the pandemic has taken on mental health. A survey conducted by the Kaiser Family Foundation (KFF) found 90% of adults in the U.S. believe “the country is facing a mental health crisis.” KFF also reports feelings of “anxiety and depression increased during the pandemic,” as well as drug and alcohol-induced deaths. This troubling trend isn’t limited to the U.S., either; the World Health Organization (WHO) found that “In the first year of the COVID-19 pandemic, global prevalence of anxiety and depression increased by a massive 25%.”
Young adults have proven especially vulnerable to the worsening mental health crisis. According to KFF, “Fifty percent of young adults (ages 18-24) reported anxiety and depression symptoms in 2023, making them more likely than older adults to experience mental health symptoms.” In our recent post on Higher Education trends, Director of Higher Education & Assistance, Kelly Trail, confirmed these findings, saying, “student resilience is at an all-time low, and mental health conditions are worsening.”
Combatting the global mental health crisis is of the utmost importance, but there are several challenges employers and insurers must overcome, such as:
Increased demand for services. As Millennials and Gen Z continue to dominate the workforce, employers should expect the demand for a wide variety of mental healthcare practitioners — including therapists, counselors, psychologists, psychiatrists, and specialists — to increase.
Provider shortages. Unfortunately, there are a limited number of providers available to meet the growing demand for comprehensive mental healthcare.
Rising costs. As a result of this disparity between supply and demand, costs for mental healthcare have been increasing. Providers are lobbying for higher concentrated rates with insurance carriers, which increases premiums, or they refuse to lower their prices to work with carriers, resulting in higher out-of-network costs.
Fortunately, solutions to combat these issues are emerging, many of which are driven by advancements in technology. Digital platforms are combatting provider shortages and making mental healthcare more accessible and affordable, while Benefits Pro espouses the benefits of using health insurance data to “develop targeted interventions, improve treatment effectiveness, and ultimately create a more comprehensive and effective approach to behavioral health.”
Learn more about how employers can provide employees with better mental healthcare coverage here.
The increased role of insurtech — and AI — in insurance
Historically, insurtech has fallen flat, often requiring a significant upfront investment that yields marginal results. However, the rise of generative AI made a splash in 2023, and the ripples are poised to extend into 2024.
Business Insider reports, "Over the course of the next three years, there will be many promising use cases for generative AI. The most valuable and viable are personalized marketing campaigns, employee-facing chatbots, claims prevention, claims automation, product development, fraud detection, and customer-facing chatbots.” However, the article also warns that despite these positive applications, “generative AI is not currently suitable for underwriting and compliance."
Other forms of insurtech are also successfully improving benefit equity in international markets by making cashless payments more accessible, preventing fraud, and improving financial inclusion.
Insurance premiums are rising due to inflation — and other factors
According to Health Affairs, “During the past five years, the average premium for family coverage has risen 22 percent—an increase in line with inflation (21 percent) and wage growth (27 percent).”
Unfortunately, recent findings from Mercer indicate this trend will continue into 2024. Mercer’s 2023 National Survey of Employer-Sponsored Health Plans predicts “total health benefit cost per employee to rise 5.4% on average in 2024, even after they make changes to their plans to slow cost growth.” Though Mercer also blames high inflation rates for driving up healthcare costs, they ascribe additional responsibility to “labor shortages in the healthcare industry.”
Another factor contributing to rising premiums is the increased reliance on walk-in and urgent care centers. It may sound counterintuitive, but we’ve found the increased reliance on fast, lower-quality healthcare does ultimately drive-up costs for two primary reasons:
The normalization of real-time access to healthcare influences patient expectations and escalates costs.
The lower quality of care administered at walk-in clinics often results in patients having to follow up with their primary care provider, which means they are paying for two visits instead of one.
Consolidation within the healthcare system is another contributing factor to increased healthcare costs since the fewer choices an employer has, the less competition there is between providers.
Finally, the proliferation of health and wellness marketing is increasingly convincing patients they need more access to (often unnecessary) healthcare — which, in turn, drives up costs.
Insurance in 2024
The trends we watched shape the insurance market in 2023 will undoubtedly continue to impact coverage, access, and prices in 2024. We know navigating these shifts is a full-time job and that small organizations often need help. At Allegiant Global Partners, we routinely leverage our background as underwriters to find ways to save our clients’ money or get them better coverage. If you need help understanding how these trends impact your team’s coverage, feel free to reach out for an informal, no-commitment conversation.