Employers Expect Healthcare Costs to Rise 8% in 2025
About 57% of employer benefits decision-makers think the GLP-1 agonist obesity drugs are a major driver of the increase.
Wegovy, Ozempic, and other new GLP-1 agonist drugs can control diabetes, melt pounds away, and possibly perform other medical miracles, but they’re not good for employers’ financial wellness. Employers recently told the Business Group on Health that they believe the popularity of high-cost GLP-1 agonists is one of the main reasons healthcare cost increases are picking up.
The 125 employers that participated in the group’s latest annual healthcare strategy survey predicted that their healthcare costs will increase about 7.8 percent in 2025, before plan design changes, up from an increase of 7.2 percent this year and 6.6 percent in 2023. They are hoping plan design changes will hold their actual healthcare cost increase to 6.6 percent.
About 57 percent of the 118 employer benefits decision-makers who answered a question about cost drivers classified GLP-1 agonist spending as “driving healthcare costs to a great or very great extent,” and GLP-1 agonists topped the list of 2024 cost drivers. Other high-cost therapies ranked second, with 46 percent of participants classifying them as major cost drivers.
Fewer than 10 percent blame healthcare system fragmentation, fraud, waste, abuse, or poor-quality providers for rising costs.
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What It Means
The results of the Business Group on Health 2025 cost increase forecast is comparable to what other forecasters are finding. The International Foundation of Employee Benefit Plans and PwC predict an 8 percent increase, and Aon predicts a 9 percent increase.
Some groups have talked more about catastrophic healthcare problems as a driver of cost increases.
Both Donald Trump and Kamala Harris have made the high cost of prescription drugs a campaign issue, and prescription drug prices could become an increasingly hot topic over the next year.
Harris has lines about “pharmaceutical companies who block competition” and “pharmaceutical middlemen who squeeze small pharmacies’ profits and raise costs for consumers” in her economic plan.
This may be a year when benefits managers and benefits brokers need to focus on coming up with creative ideas for holding prescription costs down.
From: BenefitsPRO