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A recent survey by the International Foundation of Employee Benefit Plans (IFEBP) shows U.S. employers expect an 8% increase in healthcare costs for 2025. The increase is driven by catastrophic claims and specialty drug prices, surpassing the previous 7% projections.
Surveyed employers shared which key factors likely contributed to the increase in medical plan costs for 2025. The top four factors were:
- Catastrophic claims: 20% (up from 19% last year)
- Specialty/costly prescription drugs: 20% (up from 16% last year). These drug types were predominately responsible for the rise:
- 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)
Employers are implementing various cost management strategies, focusing on utilization control and cost-sharing. Most employers (27%) plan to manage rising healthcare costs by implementing control initiatives, such as prior authorization and disease management. Additionally, more (21%) are passing higher costs to employees through increased deductibles, coinsurance, copays, or premium contributions. Other strategies include plan design initiatives, purchase and plan initiatives, data analysis initiatives, and work and wellness programs.
Employer Takeaway
Employers should review benefits offerings to find cost-saving strategies and meet employees' needs amid rising healthcare costs next year. Download the bulletin for more details.
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