This does not alleviate concerns about medical costs for employers. In fact, new projections find that inflation, GLP-1 drugs, and catastrophic medical claims will significantly increase healthcare costs for employers next year.
The average cost of employer-paid health insurance in the U.S. is expected to increase by 9% in 2025, to more than $16,000 per employee, according to an Aon analysis. This is significantly higher than the 6.4% increase in healthcare budgets that employers experienced from 2023 to 2024 (average cost per employee of $14,823 after cost reduction strategies).
Meanwhile, research from the International Foundation for Employee Benefit Plans (IFEBP) predicts that the growth rate in 2025 will be slightly lower, but still high, with U.S. employers expecting an 8% increase in median health plan costs. It turned out to be predictable. That’s an increase compared to similar surveys conducted in 2022 and 2023, which predicted a 7% rise in the same year, according to the nonpartisan group with more than 31,000 members.
Rising health care costs are a frightening prospect for employers, but there are several ways employers can keep their budgets in check. Here are some strategies.
Consider GLP-1 drugs. Employers report that the use of expensive GLP-1 (glucagon-like peptide-1) drugs, such as Ozempic and Wigovy, is a major contributor to rising healthcare costs. The drug is in high demand by employees and has promise as a treatment for obesity, but its high cost, typically $1,000 to $1,500 per patient per month, is a major problem for employers.
However, there are many steps employers can take to better control costs. According to Ray McMahan, senior vice president of payer solutions at healthcare company Precryptiv, these strategies include:
Understand if there is a direct contract price from the manufacturer. Under the new model, price relief may be provided through direct pricing to the employer. Verify that the Member is redeeming the available Coupons, that the Pharmacy is processing the Coupons, and that you and/or your Third Party Administrator or Pharmacy Benefits Manager are coordinating the Membership. Please. Ask your pharmacy benefits manager and consultant to have a detailed discussion about coordinating drug and medical coverage for bariatric care. To understand the impact of expenditures and rebates, compare and reconcile the clinical criteria used during the prior authorization process with drug label claims.
Implement management initiatives. When IFEBP asked what initiatives would have the most impact on cost control in 2025, employers cited utilization management initiatives, such as requiring prior authorization and leveraging disease management (employers (27% of respondents said this, up from 22% last year). Introduction of a nurse advice line.
“Over the course of 2024, employers are implementing several strategies to manage these costs, including proactive measures to coach compliance and manage side effects,” said Julie Stich, vice president of content at IFEBP. “We are placing increased emphasis on utilization management efforts such as approvals and case management.”
Provide your employees with guidance and resources about healthy choices. Oliver Ayers, president of benefits company Key Benefit Administrators, says one of the most effective ways to support positive outcomes for an organization and its employees is to provide guidance and resources to plan members. He said it was true.
“Healthy lifestyle changes are an essential element for good outcomes,” he said, adding that such changes could work in parallel with providing GLP-1 drug coverage. he added. “Ensuring access to telehealth services and providing coaching services to help employees with things like diet and exercise will help ensure the effectiveness of GLP-1 drugs and other pharmaceutical products and manage side effects. can.”
Share costs with employees. One obvious strategy for reducing costs for employers is to share them with employees. These methods include raising deductibles and implementing other cost-sharing provisions that result in higher out-of-pocket costs for plan members to receive treatment. Many employers have avoided making these types of changes, but Tracy Watts, Mercer’s national leader for U.S. health policy, said changes become more difficult in an era of sustained cost increases. Ta.
“Employers remain concerned about health insurance affordability and ensuring that employees can pay out-of-pocket costs for treatment,” she says. “However, achieving sustainable spending levels for your organization also requires managing the overall cost of health care. Balancing these competing priorities will be a challenge in the coming years.” I guess.”
Promote mental health help. According to Mercer data, there has been a significant increase in the use of behavioral health services recently. Avoiding employee stress through a variety of mental health supports, such as apps, stress programs, and a healthy work environment, can have significant benefits, including reducing overall healthcare costs.
“The more organizations that can help build resilience, teach self-care, and prioritize work-life balance before things escalate into severe symptoms with functional implications, the better.” says Jennifer Barsall, clinical psychologist and clinical director of mental health practice ComPsych. Providers working with employers. “This is where ongoing care, including prevention, becomes important.”
Understand the interplay of medical and pharmacy interests. Specialty drugs may be covered by medical or pharmacy benefits, McMahan explained.
“There is often a gray area as to where a specialty falls, which can be related to whether the drug is being administered in a clinical setting such as a doctor’s office, outpatient clinic, or infusion center. Yes,” she said. “Rely on your consultant to understand the interactions. By taking a comprehensive approach to managing all medications and ensuring programs are complementary and non-conflicting, we You can reduce your spending on weight health management.”
