According to a recent survey by the International Foundation of Employee Benefit Plans (IFEBP), U.S. employers anticipate a median 8% increase in health care costs for 2025. This projected increase is attributed to catastrophic health claims and rising specialty prescription drug prices. Notably, this projection surpasses the estimates from the past two annual surveys, both of which had forecasted a 7% rise.
Key Factors Driving the Projected Increase
The survey highlighted several primary factors contributing to the rise in medical plan costs for 2025:
- Catastrophic Claims: 20% (up from 19% last year)
- Specialty/Costly Prescription Drugs: 20% (up from 16% last year)
- Glucagon-like peptide-1 drugs: 75%
- Cell and gene therapy: 19%
- Other specialty drugs: 31%
- Medical Provider Costs: 18% (up from 14% last year)
- Utilization Due to Chronic Health Conditions: 16% (down from 22% last year)
Cost Management Strategies
Employers are adopting various cost management strategies, with an emphasis on utilization control and cost-sharing initiatives. The following approaches are being implemented:
- Control Initiatives (27%): Includes prior authorization, case and disease management, and nurse advice lines.
- Cost-Sharing Measures (21%): Involves increasing deductibles, coinsurance, copays, or premium contributions, up from 16% in 2024.
- Plan Design Initiatives (15%)
- Purchase and Plan Initiatives (19%)
- Administration and Data Analysis Initiatives (7%)
- Work and Wellness Programs (6%)
Employer Takeaway
The IFEBP report suggests that employers will likely continue facing challenges with rising health care costs in the coming year. While the most effective strategies may differ among organizations, it is crucial for employers to review their benefits offerings to identify the most effective cost-saving measures and ensure they meet employees’ needs.
Contact Us
For more health care resources, please contact us.
Oregon Techworks members access WorkForge HR Pro Portal and receive customized daily updates from industry experts regarding regulations, benchmarking, trends, guides, and resources. All Oregon technology employers should request a group insurance quote through our association health plan now to compare with their 2025 renewal. For more information and to get your Techworks quote contact Ty@get-benefits.com.
The content of this News Brief is of general interest and is not intended to apply to specific circumstances. It should not be regarded as legal advice and not be relied upon as such. In relation to any particular problem which they may have, readers are advised to seek specific advice. © 2024 Zywave, Inc. All rights reserved.
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