According to predictions from healthcare advisors, US companies should prepare for the highest increase in premiums for health insurance in a decade the following year. However, workers may be slightly spared this time due to the tight job market.
Employer healthcare expenditures will increase by 5.4% to 8.5% in 2024, according to benefit experts from Mercer, Aon, and Willis Towers Watson, as a result of medical inflation, a surge in demand for pricey weight-loss medications, and increased accessibility to expensive gene therapies.
More than two-thirds of companies either have no plans to pass on any cost increases to their employees in 2024 or will be passing on less than the anticipated increase, according to a survey done by Mercer, a division of Marsh McLennan.
Beth Umland, head of health and benefits research at Mercer, said that companies don't want to put further financial strain on workers who are already dealing with inflation, particularly at a time when they're really depending on their health benefits to retain staff working for them.
In the twelve months ending in August, US consumer prices increased 3.7%, slowing from a high of 9.1% in June of the previous year. Although contracts between hospitals and insurers for the cost of procedures are sometimes written months or even a year in advance, medical cost hikes typically lag overall inflation.
For medium-sized and large-sized enterprises, benefit advisors aid in the creation of insurance programs. Benefits from such programs are received by almost two-thirds of American workers.
Aon estimates that the cost of healthcare for employers will rise by 8.5% in the coming year, with weight-loss medications alone accounting for 1% of the increase.
The demand for Wegovy, a diabetic treatment from Novo Nordisk that has been authorized to treat obesity, along with related diabetes medications like Ozempic from Novo and Mounjaro from Eli Lilly, which is used "off-label" for weight loss, has increased significantly in the past year.
In the previous year, about six gene treatments, the majority of which cost above $1 million, have been authorized in the United States. One employee receiving gene therapy treatment might cause a company's costs to increase dramatically, according to advisers.
Employers will increasingly turn to artificial intelligence to reduce the costs associated with administrative workers as they search for ways to contain rising costs. They also predicted that coverage for pricey therapies would be subject to more scrutiny.
For some operations, businesses and insurance are also selecting hospital networks that are less costly.