Rising Health Costs

According to WTW’s Global Medical Trends Survey, the cost of medical care benefits in the U.S. is projected to increase about 8.9 percent in 2024, compared with 8.2 percent in 2023. Analysts predict it will rise again in the coming few years.

Meanwhile, a survey of nearly 100 health insurers and health plan administrators by benefits consulting firm Buck also found that medical costs for employer-sponsored plans continue to outpace inflation, rising on average between 6.8 percent and 7.3 percent.

The drivers of medical costs, according to insurers, range from new medical technologies to overuse of care due to medical professionals recommending too many services or overprescribing. Nearly half of insurers (49 percent) also indicated that insured members’ poor health habits are among the top factors driving higher health costs, according to the WTW survey, while 47 percent cited the underuse or lack of preventive services as a significant cost driver.

Buck found that prescription drugs will be especially costly in the coming year, with health insurers reporting a weighted average prescription drug trend of 9.8 percent. Increases in specialty drug utilization and “new drugs on the market” were cited as contributing to the increase, Buck found. Many industry experts have pointed to the rise of interest and demand for GLP-1 drugs as a weight loss aid as a contributor to growing healthcare costs.

The two new surveys of insurer predictions come after other surveys in 2023 made similar predictions of rising health costs. For instance, the International Foundation of Employee Benefit Plans found that employers are projecting a 7 percent hike for health care costs in 2024, while Aon projected that average costs for U.S. employers that pay for their employees’ health care could increase 8.5 percent to more than $15,000 per employee in 2024.

We can assist with designing an affordable, competitive, and comprehensive benefits plan that meets employee needs and your budget.

 


Tim Schaffer
President

(443) 321-7777 | website | email
2127 Espey Court, Crofton, MD 21114

 

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