---
title: What's Driving the Surge in Health Care Costs for 2025?
description: Health care cost projections for 2025 indicate a 7% to 8% increase, leading to higher premiums, deductibles, and copayments for employees.
---

[Employee Benefit News for School, City and County Employers ](https://blog.nisbenefits.com)

# [What's Driving the Surge in Health Care Costs for 2025?](https://blog.nisbenefits.com/driving-health-care-costs-surge-2025)

 Written by [Steve Smith](https://blog.nisbenefits.com/author/steve-smith) | Feb 14, 2025 12:45:00 PM

*2 minute read*

Health care and employee benefit costs are rising rapidly. Projections for 2025 indicate a 7% to 8% increase, leading to higher premiums, deductibles, and copayments for employees. Here are some of the factors driving these cost increases.

 

## **Glucagon-like Peptide-1 (GLP-1) Drugs**

GLP-1 drugs for weight loss are gaining popularity, with 1 in 8 Americans having tried them and 6% currently using them. By 2030, 9% of the U.S. population may be on these medications. They cost about $1,000 monthly and are often not covered by insurance unless prescribed for diabetes. Users must continue these expensive treatments to maintain benefits.

 

## **Cell and Gene Therapies (CGT)**

Advanced treatments like CGT target conditions such as cancer and sickle cell anemia, offering significant medical progress but at a high cost. These therapies can range from thousands per week to millions per dose, impacting healthcare spending. With many treatments approved and more in trials, by 2025, nearly 100,000 U.S. patients could require CGT, potentially costing $25 billion.

 

## **Biologics**

Specialty drugs, including biologics, are rapidly increasing pharmacy costs. Biologics, derived from living organisms, treat conditions like cancer and arthritis but are expensive. Biosimilars, cost-effective alternatives, offer similar safety and effectiveness, expanding patient access. More biosimilars are gaining U.S. Food and Drug Administration approval annually.

 

## **Health Care Labor Costs**

The healthcare workforce is insufficient to meet rising demands, driven by an aging population and retiring workers. This shortage leads to increased labor costs, which are often passed on to employers and employees.

** **

## **Chronic Health Conditions**

Nearly 90% of U.S. health care spending targets chronic and mental health conditions like heart disease, stroke, cancer, diabetes, arthritis, and obesity. These conditions are on the rise and expected to continue growing in prevalence.

 

## **Aging Population**

The U.S. population aged 65 and older is growing, with over 55 million currently and nearly 80 million expected by 2040. Health care spending for this group is significantly higher, about five times that of children and 2.5 times that of working-age individuals.

Download the [bulletin](https://blog.nisbenefits.com/hubfs/blog-supporting-docs/bulletin-health-care-costs-rising-2025.pdf) for more details.

 

[View full post](https://blog.nisbenefits.com/driving-health-care-costs-surge-2025)

```json
{
  "@context" : "http://schema.org",
  "@type" : "BlogPosting",
  "author" : {
    "@type" : "Person",
    "name" : "Steve Smith"
  },
  "dateModified" : "2025-03-04T16:40:00.838Z",
  "datePublished" : "2025-02-14T12:45:00Z",
  "headline" : "What's Driving the Surge in Health Care Costs for 2025?",
  "image" : {
    "@type" : "ImageObject",
    "height" : 500,
    "url" : "https://info.nisbenefits.com/hubfs/blog-headers/25-health-costs-b.jpg",
    "width" : 800
  },
  "mainEntityOfPage" : "https://blog.nisbenefits.com/driving-health-care-costs-surge-2025",
  "publisher" : {
    "@type" : "Organization",
    "logo" : {
      "@type" : "ImageObject",
      "height" : 60.0,
      "url" : "https://info.nisbenefits.com/hubfs/NIS_March_2025/Images/NIS%20Logo%20Footer.png",
      "width" : 218.18182
    },
    "name" : "Employee Benefit News for School, City and County Employers"
  }
}
```