A new report has found that the cost of health insurance is nearing post-pandemic highs, with Americans having to shell out large portions of their checks just to be protected.
According to WTW, a consulting firm, the cost of health insurance is on the rise, as its report says that US employers estimate their healthcare costs will increase by 7.7% in 2025, compared with 6.9% in 2024 and 6.5% in 2023.
This increase will affect a wide swath of the country, as around 165 million Americans get health insurance through their work.
The cost of healthcare has been on the rise for some time, but the recent jump has given some sticker shock, and as a result, employers are starting to look at different options. WTW reports that 52% of companies plan on implementing programs that will reduce total costs. This could include choosing lower-cost providers and sites of care.
While this option would save Americans money in their paychecks, it could also mean they have a narrower network of doctors to choose from.
Other findings in the report say that 34% of employers are preparing to shift some expenses from healthcare plans to employees through higher premiums or by raising co-pays on high-deductible plans.
Companies are having these thoughts at a time when healthcare expenses are already at record highs.
According to the KFF’s 2024 employer health survey, family premiums for employer-sponsored health insurance rose 7% this year, pricing subscribers at $25,572. While employers pick up the majority of that price point, employees are still responsible for more than $6,200 on average.
“With cost increases reaching a post-pandemic high, companies are concerned about the burden it’s putting on their workforces, especially since it affects decisions about insurance coverage and care,” Tim Stawicki, WTW’s chief actuary of health and benefits, said in a statement.
So what are employers doing to address the high costs?
WTW found that 43% are planning on taking vendor/health plans out to bid to see if it can save money while not reducing the level of care offered. Other plans include evaluating employee assistance programs (38%), exploring narrow networks (30%), and looking at potential technology solutions to reduce costs (54%).
Top areas of focus employers plan to focus on to help promote employee wellbeing and support affordability include weight management (40%), cancer and oncology (34%), cardiovascular health (28%), and women’s health (27%).
“To navigate the current healthcare environment, companies need to proactively address cost challenges and implement effective risk management strategies,” Courtney Stubblefield, the managing director of Health & Benefits for WTW, said in a statement. “By doing so, they can mitigate financial risks, support the wellbeing of their workforce and achieve long-term sustainability.”