The Deferred Care Cliff

PUBLISHED OCTOBER 2025

So you thought the 2020 pandemic was over? If you’re an employer, think again.

The bill for two years of delayed doctor’s visits is coming due, and U.S. businesses are footing that bill. The result: a surge in complex, late-stage disease diagnoses that is fundamentally reshaping employer health-care strategy, say executives from insurance companies and provider organizations. Business leaders who act now won’t just save money—they’ll build a more resilient workforce.

It was the silent side effect of the pandemic that no one in the C-suite fully anticipated. As COVID-19 overwhelmed hospitals and lockdowns kept patients at home, a parallel health crisis was brewing. Routine colonoscopies were canceled. Mam-mograms were postponed. Check-ups for hypertension and diabetes were simply skipped. For nearly two years, the American healthcare system, outside of the ER, went quiet.

But that silence was deceptive. It was the sound of care being deferred, of conditions festering undetected. And now, that silence has been broken by a seismic and costly roar.

Welcome to the “Deferred Care Cliff,” the next great financial and human capital challenge for American business. The pent-up demand for health care is not just a surge in volume; it’s a dramatic shift in severity. Employees began returning to doctors’ offices in droves in 2022, but they are presenting with cancers at Stage IV instead of Stage I, with heart failure instead of manageable hypertension, with diabetic complications requiring dialysis instead of medication.

The data is stark. Analysis of CDC and state health department data from Kansas and Missouri reveals a chilling pattern: a sharp decline in diagnosed cases in 2021, followed by a violent rebound in 2022 and 2023 of more advanced and complex conditions. While 2024 showed signs of the surge plateauing, the baseline of disease severity—and its associated cost—has been permanently elevated.

We are no longer paying for the simple screening test; we are paying for the complex, catastrophic treatment that could have been prevented, insurance executives privately say. Employers are staring at a claims landscape that has fundamentally deteriorated, and the premium hikes they are seeing are not a blip. This is the new reality.

The impact is hitting corporate America where it hurts most: the bottom line. Group health-insurance premiums are skyrocketing, with renewals for self-funded and fully insured plans coming in 20-50 percent higher than in pre-pandemic years. But this isn’t a problem that can be solved by simply passing costs to employees. In fact, that approach would only deepen the crisis by encouraging further deferral of care.

The most forward-thinking business leaders are realizing that the only viable path forward is a strategic pivot—from being passive purchasers of health care to active stewards of employee health.

Anatomy of a Crisis

The deferred-care phenomenon is not affecting all conditions equally. It is most acute in areas where early detection and consistent management are the sole barriers between chronic illness and catastrophic, even multi-million-dollar claims.

The Oncology Time Bomb: During lockdowns, screenings like colonoscopies and mammograms plummeted. The consequence is a well-documented surge in new cancer diagnoses, but with an alarming twist: a higher proportion are late-stage. The financial implication is staggering. Treating a Stage I colon cancer may cost an employer’s health plan tens of thousands of dollars. Treating Stage IV, with its complex drug regimens, prolonged hospitalizations, and supportive care, can easily run into seven figures. A single late-stage cancer case can be enough to trigger a painful increase in a company’s stop-loss insurance premium for years.

The Crashing Heart: The pandemic saw many avoid the ER, even with chest pains. Coupled with lapses in managing blood pressure and cholesterol, the result is a surge in acute, catastrophic cardiac events. Employers are now seeing the costs of emergency interventions, stent placements, and bypass surgeries, rather than the minimal costs of generic statins. These events are among the most expensive single claims and have a direct, debilitating impact on productivity through short- and long-term disability.

Complications of Diabetes: Disrupted routine care led to skipped A1c tests and missed ophthalmologist visits. The effect is now clear: a sharp rise in employees’ presenting with severe, often preventable complications like diabetic retinopathy (leading to vision loss) and end-stage renal disease requiring dialysis. The cost shift is dramatic—from low-cost, proactive management to the massive, ongoing expense of dialysis, a line-item that can single-handedly distort a plan’s performance.

A Mental Health Tsunami: While different in origin—driven by pandemic stress rather than deferred diagnosis—the mental-health crisis is inextricably linked. The demand for services far outstrips supply, and the severity of cases is intense. This is no longer a peripheral issue. Poor mental health is a primary driver of presenteeism, absenteeism, and overall medical costs due to comorbidities. It is a core business imperative.

Decoding the Sticker Shock

For CFOs and HR leaders, premium-renewal notices have become a document of dread. Understanding the “why” behind the number is the first step toward crafting a solution.

The old playbook of tweaking deductibles and co-pays is not just ineffective now; it’s dangerous, benefits strategists say. Cost-shifting in this environment will only cause employees to delay care further, ensuring that the next wave of claims is even more severe and expensive.

Proactive employers are taking three key steps to diagnose their own financial exposure:

1. Deep Data Dives: Self-funded employers are tasking their Third-Party Administrators with forensic-level analysis of claims. They are looking beyond overall cost increases to critical metrics: Has the average cost per case for cancer or cardiac care skyrocketed? Is there a higher incidence of “catastrophic” claims exceeding $100,000? Are they seeing a spike in advanced imaging and inpatient stays? Fully insured employers are pressuring carriers for group-specific claims experience and demand that they quantify the “deferred care” impact in their rate filings.

2. Modeling for a Multi-Year Event: The smartest leaders are not treating this as a one-time spike. The effects of deferred care are expected to ripple for as much as five more years as poorly managed chronic conditions inevitably progress to require more intensive intervention. Financial modeling must account for this sustained pressure.

3. Fortifying Their Financial Back-stop: For self-funded plans, the surge in high-cost claims makes stop-loss insurance more critical than ever. Companies are conducting thorough reviews of their specific and aggregate attachment points and working with specialist brokers to ensure their coverage can withstand the new claims environment.

The New Playbook

The defining characteristic of a winning strategy in this new era is a fundamental shift from reactive cost-containment to proactive health investment. The goal is simple: make it easier, not harder, for employees to get the right care at the right time.

1. Double Down on Prevention and Early Detection. Aggressively.

This is no longer about offering a wellness program. It’s about removing every possible barrier to front-line care.

• Remove Financial Barriers: Waive copays for primary care, preventive screenings, and telehealth. Make it financially effortless to see a doctor.

• Launch Targeted Campaigns: Partner with vendors to run aggressive outreach for cancer screenings, biometric screenings, and diabetes management. Consider on-site or near-site clinics to bring care directly to the employee.

• Incentivize Action: Offer meaning-ful premium discounts or HSA contributions for completing a health risk assessment and annual preventive visits.

2. Deploy Healthcare Navigation and Advocacy.

Employees diagnosed with late-stage cancer are often terrified and overwhelmed. Without guidance, they may not find the highest-quality, most cost-effective care. Top-tier navigation services act as trusted guides, steering employees to centers of excellence and helping them avoid unnecessary treatments. The ROI is clear: these services often reduce total claim costs by 5-10 percent, insurers say, paying for themselves while providing an invaluable employee benefit.

3. Optimize the Pharmacy Benefit.

With specialty drug costs soaring, a passive PBM relationship is a major liability.

• Scrutinize Contracts: Audit for hidden fees and spread pricing.

• Incentivize Value: Ensure plan design encourages the use of generics and biosimilars.

• Manage Specialty Drugs: Implement a robust Specialty Pharmacy Management program to closely manage high-cost drug therapies, particularly for oncology.

4. Make Mental Health a Central Pillar, Not a Perk.

Go beyond the basic EAP. Ensure your health plan’s behavioral health network is actually robust and has available providers. Invest in digital mental health platforms to increase access. Train managers to reduce stigma and recognize signs of distress. A mentally unwell workforce is an unproductive one.

Communicating in a Crisis

How employers communicate cost changes is as important as the changes themselves. The old method—announcing a premium increase in a memo—is a recipe for morale destruction and mistrust.

The new communication strategy is built on two pillars:

• Radical Transparency: Explain the “why” to employees. “Healthcare costs are rising industry-wide because the pandemic created a backlog of complex, advanced conditions. We are all facing this together.” This frames the company as a partner, not a perpetrator.

• Emphasize Value, Not Just Cost: Lead with enhancements. “To help you stay healthy and manage these costs, we’ve added a free health-care navigator, waived copays for preventive care, and expanded our mental-health network. As part of our shared responsibility, we also had to make a modest adjustment to the premium share.” This dem-onstrates investment in their well-being.

When cost-sharing is necessary, the most strategic employers protect lower-paid employees through tiered premium structures and avoid increasing deductibles for essential, frontline services, such as primary care and mental health. They couple this with financial wellness tools to help employees manage medical expenses, understanding that a financially stressed employee is one who will, once again, defer care.

The Leadership Mandate

The Deferred Care Cliff is not a temporary market disruption. It is a permanent recalibration of the health risk within the American workforce. Employers who respond with a reactive, cost-shifting mindset will inherit a less healthy, less productive workforce and will face even-higher long-term costs.

Those who see this moment as a strategic opportunity—who invest boldly in prevention, early intervention, and high-quality navigation—will do more than protect their bottom line; they will also enhance their long-term value. They will build a more resilient, engaged, and productive organization. In the final analysis, the health of a company’s balance sheet has always been inextricably linked to the health of its people. That truth has never been more evident, or more urgent, than it is today.