After years of employer health benefit costs increasing at a 3% to 4% annual rate, the employer health benefit cost will rise by 5.7% this year and 6.0% next year according to a survey conducted by Willis Towers Watson. (1)
There are several reasons cited for the jump in benefit costs, including:
- The consolidation of health systems that lowers competition
- Introduction of expensive gene and cellular therapies
- Increase demand for expensive prescription drugs including the costly GLP-1 semaglutide drugs for diabetes and obesity
- Impact of long-term illnesses that weren’t treated during COVID
- High inflation and a tight labor market in the health care industry
Despite the increasing costs for employers, the survey suggests that employers are not planning to pass the costs onto employees. Rather, employers will try to manage costs, especially in the areas of:
- High-cost claimants
- Cost of specialty drugs
(1) https://hrexecutive.com/employer-health-benefit-costs-to-soar-again-in-2024-why/