Employers Redesign Plans to Cut Health Costs

1 minute read

The 2024 Best Practices in Healthcare Survey by WTW reveals that rising healthcare costs are prompting over 51% of U.S. employers to redesign plans for affordability, focusing on new designs and network strategies to guide employees to cost-effective, high-quality providers.

U.S. health care costs have soared since the COVID-19 pandemic, with nearly half of employers anticipating expenses to exceed budgets this year. Forecasts predict a 7.7% rise, with estimates ranging from 5%-9%. Reports indicate an 8% median increase by 2025, driven by rising pharmacy and catastrophic health costs.

Cost Mitigation Strategies

Beyond redesigning plans, 52% of employers aim to cut costs by introducing new programs. Strategies include promoting drug discount cards and allowing medication purchases from retail or "cost plus" outlets. Future cost-cutting measures include:

• Bidding on vendors and health plans
• Assessing employee assistance and mental health programs
• Leveraging technology for expense management
• Carving out pharmacy benefits

Additionally, 34% of employers plan to shift costs to employees via premium contributions, while 20% will promote account-based or high deductible health plans.

Takeaway

As health care expenses continue to climb, employers are likely to adopt innovative and forward-thinking strategies. Employers will tailor their plan designs to meet unique needs, but with the right tactics, may help offset the rising prices projected in 2025. Download the bulletin for more details.