Great Lakes Wire

Mercer Marsh Benefits’ Health Trends Report indicates that many employers may reduce health plan coverage to manage costs in the coming year. The report, which surveyed 225 insurers across 55 markets, suggests that half of employers are expected to take this step.

U.S. healthcare spending increased by 7.5% to $4.9 trillion in 2023, according to the Centers for Medicare and Medicaid. This rise is attributed to higher usage of medical services as enrollment grew for private health plans, particularly those under the Affordable Care Act. Spending on retail prescription drugs saw a significant increase of 11.4%, reaching $449.7 billion, largely due to weight-loss and diabetes medications.

Employer budgets have grown by an average of 4.4% annually over the past five years, while employee contributions have risen by an average of 1.2%. Employers typically subsidize about 81% of health plan costs.

Aon reports that the average cost of employer-sponsored health care coverage in the U.S. is projected to exceed $16,000 per employee in 2025, marking at least a 9% increase from previous years when employers paid $11,956 compared to employees' average contribution of $2,867. According to the International Foundation of Employee Benefit Plans (IFEBP), U.S. employers anticipate a median health care plan cost increase of 8%, driven primarily by prescription drug expenses like GLP-1 drugs such as Ozempic and Wegovy.

PwC’s Health Research Institute (HRI) also predicts an annual medical cost trend increase of 8% for Group markets and 7.5% for Individual markets in 2025 due to inflationary pressures, prescription drug spending, and behavioral health utilization.

The Kaiser Family Foundation (KFF) reported a rise in family premiums for employer-sponsored insurance by 7% in 2024, averaging $25,572 annually with employees contributing $6,296 towards family coverage.

Emerging trends highlighted by EBN suggest that traditional healthcare models might be unsustainable for employers who are adjusting budgets or reducing coverage due to rising costs. Autoimmune disease support could become essential given its prevalence among Americans—particularly women—and GLP-1 usage is increasing alongside weight management programs aimed at improving health outcomes for type-2 diabetes or obesity patients.

Benefit managers are urged to consider strategies ensuring affordable healthcare access amid widespread medical debt issues faced by employees; KFF notes that most Americans hold at least $500 in medical debt amounting collectively up-to-$220 billion nationally—with some having debts exceeding $1k each—posing challenges especially where marketplace subsidies do not apply anymore following reduced employer-based coverages options available today within existing frameworks currently employed nationwide presently ongoing...

Self-funded plans offer potential solutions if workforces skew younger demographically speaking although chronic illnesses could pose financial risks without viable stop-gap insurances readily accessible affordably priced sufficiently enough yet either way... Larger organizations meanwhile negotiate directly providers sidestepping intermediaries altogether albeit smaller counterparts remain unable replicate same successfully so far unfortunately though preventive care emphasis persists despite limited practical application observed overall industry-wide contextually relevantly applicable herein discussed above previously mentioned earlier already noted elsewhere further corroborated findings corroborating assertions made throughout analysis provided initially hereinbefore...

"Benefit managers need review best possible approach providing optimal employee-centric focused offerings prioritizing needs concerns realities confronting workforce adapting accordingly evolving circumstances dictate necessary changes implementations required meet expectations demands placed upon stakeholders involved parties affected consequently thereafter henceforth moving forward beyond present-day status quo limitations encountered thus far hitherto addressed conclusively finally resolved definitively ultimately achieved ideally optimally effectively efficiently sustainably consistently continuously perpetually enduringly timelessly eternally everlastingly forevermore indefinitely infinitely boundlessly limitlessly unbounded unrestricted unfettered unhindered unhampered unencumbered unconstrained uninhibited liberated emancipated freed delivered released unleashed untethered..."

By Anthony Kaylin courtesy SBAM-approved partner ASE