Health care expenses are expected to rise significantly in 2025, with projections indicating a 7%-8% increase. This aligns with similar trends in 2024, showcasing the cumulative impact of ongoing cost growth. Below are the primary drivers of these increases:
- GLP-1 Medications: Glucagon-like peptide-1 drugs typically require long-term use to deliver intended health benefits. Currently, 6% of Americans use these medications, with the percentage potentially rising to 9% by 2030.
- Pharmacy Costs: Rising costs in general pharmacy are fueled by price hikes for existing drugs, along with innovations like cell and gene therapies, biologics, and biosimilars.
- Health Care Workforce Costs: Increased spending on wages and staffing in the health care sector often translates into higher costs for employers and patients.
- Chronic Conditions: About 90% of U.S. health care spending is dedicated to managing mental and chronic health conditions, including heart disease, cancer, diabetes, and obesity.
- Aging Population: The number of Americans aged 65 and older continues to rise, with over 55 million aged 55 or older currently. By 2040, nearly 80 million are expected to be in this age group.
Although these rising costs are inevitable, informed employers can proactively address these challenges. Reach out to us for additional insights and resources.