Employers are projecting the healthcare price development to extend by a median of 9% for 2026, and seven.6% after they make plan design adjustments, in keeping with a Tuesday survey from the Enterprise Group on Well being, an employer advocacy group.
“That is the best single-year forecast in additional than a decade,” mentioned Ellen Kelsay, president and CEO of the Enterprise Group on Well being, throughout a press briefing. “The compounding impact of excessive healthcare development will increase implies that by 2026, healthcare prices [are] projected to be 62% increased than they have been in 2017.”
For the second 12 months in a row, precise healthcare prices exceeded the forecasted price for employers. In 2024, employers anticipated a 7.1% improve in healthcare prices, and really skilled a 7.5% improve. In 2023, employers anticipated a 6.6% improve in prices, and skilled a 6.8% improve. As well as, two-thirds of employers say that rising prices are affecting their means to supply world advantages.
The Annual Employer Well being Care Technique Survey obtained responses from 121 employers throughout quite a lot of industries. These employers collectively cowl 11.6 million folks globally.
Further findings from the survey embody:
1. Prescription drug prices are a serious contributor to healthcare prices. In 2024, pharmacy accounted for a median of 24% of general healthcare spend, in comparison with 21% in 2021. And GLP-1s are partly accountable, with 72% of respondents saying that they drive prices to a “very nice extent” or a “nice extent.” One other 61% mentioned the identical about high-cost therapies.
2. Virtually all employers cowl GLP-1s for diabetes, whereas 73% cowl them for weight problems. And about 79% of employers mentioned they’re seeing elevated utilization of weight problems remedies. In terms of protecting GLP-1s for weight problems, the most typical utilization administration techniques are prior authorization, requiring participation in a weight administration program and assembly a sure physique mass index threshold.
3. When requested what situations are driving prices, 88% mentioned most cancers, 71% mentioned musculoskeletal situations and 35% cited cardiovascular situations. That is the fourth 12 months in a row by which most cancers is the highest situation contributing to price. To handle most cancers prices, many employers are increasing protection of most cancers screenings, together with for colon most cancers, breast most cancers and pores and skin most cancers. About half of the respondents additionally mentioned that they are going to supply entry to facilities of excellence for most cancers in 2026.
4. To cut back healthcare prices, employers’ high methods embody leveraging the request for proposal course of to get higher pricing from incumbents or new distributors, eliminating lower-utilized packages, changing underperforming distributors, and limiting protection for GLP-1s.
5. About 17% of employers have adopted a non-traditional or various well being plan, whereas 7% are including it in 2026 and 36% are contemplating it for 2027 or 2028. As well as, 16% are utilizing a clear pharmacy profit supervisor, whereas 11% are including one in 2026 and 43% are contemplating it in 2027 or 2028. Nonetheless, switching to a brand new pharmacy pricing or contracting mannequin doesn’t come with out its challenges, together with “problem of calculating the monetary influence of the conversion and no urge for food for member disruption,” the report acknowledged.
6. Employers are additionally listening to a number of coverage initiatives. About 85% of respondents need the federal government to guard the tax therapy of employer well being protection, 81% need the federal government to guard ERISA preemption and 62% need the federal government to deal with prescription drug pricing. As well as, 66% of employers mentioned they’re involved or very involved that adjustments to authorities packages (reminiscent of Medicare and Medicaid) will hurt employer-sponsored protection.
This wasn’t stunning because it aligns with “long-held employer beliefs that efforts to cut back prices for packages like Medicare and Medicaid will usually lead to price shifting to employer-sponsored plans,” mentioned Brenna Shebel, vp of the Enterprise Group on Well being, in the course of the press briefing.
Photograph: PM Pictures, Getty Pictures
