Health care costs are projected to increase substantially in 2025. According to industry surveys and reports, employers anticipate health care costs to increase between 7%-8% in 2025. As a result, employer-sponsored health care plans will continue to cost more per employee, impacting employers and employees alike.
Current factors leading to increased costs reflect inflationary pressures that have impacted health care since 2022. Medical inflation, rising pharmacy spending and increased demand for behavioral health care services are likely to continue the rising trajectory of health care spending.
Key Drivers of Cost Increases
As 2025 approaches, employers remain curious about what factors are driving these increases. Here are some key factors impacting rising health care costs in 2025:
Summary
Health care costs will likely rise significantly in 2025, but employers will take action to lower costs. Whether it’s standard cost mitigation strategies, such as cost sharing, or new initiatives to lower pharmacy costs, employers can consider which strategies can have a tangible impact on their health care spend. Pursuing the right initiatives can make a sizeable impact on an organization’s bottom line and the financial health of its employees. Rising health care costs may be unavoidable, but informed employers who enact proactive cost-reduction strategies will be better prepared for the changing health care landscape in 2025.
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