What's Happening?
The Business Group on Health (BGH) has released its annual healthcare benefits survey, revealing that large U.S. employers experienced a median cost increase of 7.5% in 2024 for employer-sponsored health insurance, surpassing expectations. This marks the second consecutive year of higher-than-projected spending increases. Cancer remains the most costly condition, with 88% of employers ranking it as a top cost-driver. Employers are considering various measures to manage these costs, including negotiating with vendors and potentially increasing employee contributions. Pharmacy benefit spending also rose, with weight-loss drugs contributing significantly to the increase.
Why It's Important?
The rising healthcare costs are significant as they could lead to increased financial burdens on both employers and employees. Employers may need to pass some of these costs onto employees, potentially increasing their premium contributions and out-of-pocket expenses. This trend highlights the need for strategic actions to manage healthcare spending effectively. The focus on cancer and pharmacy costs underscores the ongoing challenges in managing chronic conditions and the impact of new therapies on healthcare budgets.
What's Next?
Employers are exploring options to mitigate cost increases, such as replacing underperforming vendors and implementing new pharmacy benefit manager arrangements. The survey indicates that 2026 may see further increases in employee contributions. Employers are also considering expanding cancer prevention measures, which could help manage long-term costs. The ongoing discussions and actions taken by employers will be crucial in shaping the future of healthcare benefits and cost management strategies.
