Employer healthcare coverage costs are exploding and it is being driven by drug spending. Listen in to hear why employers are concerned and what they will do about it.
About The Podcast:
Millions of Americans feel confused and frustrated in their search for quality healthcare coverage.
Between out-of-control costs, countless inefficiencies, a lack of affordable universal access, and little focus on wellness and prevention, the system is clearly in dire need of change.
Hosted by healthcare policy and technology expert Marc S. Ryan, the Healthcare Labyrinth Podcast offers accessible, incisive deep dives on the most pressing issues and events in American healthcare.
Marc seeks to help Americans become wiser consumers and navigate the healthcare maze with more confidence and certainty through The Healthcare Labyrinth website and his book of the same name.
Marc is an unconventional Republican who believes that affordable universal access is a wise and prudent investment. He recommends common-sense solutions to reform American healthcare.
Tune in every week as Marc examines the latest developments in the space, offering analysis, insights, and predictions on the changing state of healthcare in America.
About The Episode:
On this episode, Marc discusses a recent survey that shows employer coverage costs are exploding and it is being driven by drug spending. Employers are very concerned and plan on deploying several strategies to rein in costs.
Key Takeaways:
The Business Group on Health’s annual healthcare strategy survey shows employer costs in 2025 will likely grow by as much as 8%.
This trend is a major increase from 6% in 2022.
Even with plan design changes, trends will exceed the pre-pandemic level.
Employer healthcare costs will grow more than 50% since 2017. This trend will persist.
Almost all costs are being driven by drug spending. Both price and utilization are responsible.
Between 2021 and 2023, the median percentage of health care dollars spent on pharmacy has jumped from 21% to 27%. That is a 14% to 15% annual trend.
One of the biggest drivers of increases in drug costs are GLP-1 weight-loss drugs.
Employers are seeing GLP-1s adopted for disease states. Employer coverage also has been one of the few healthcare product segments to extend coverage to those that are just obese or overweight.
Seventy-nine percent of employers have seen an increase in interest in obesity medications.
About 70% of employers currently cover or will cover (in 2025) GLP-1s for obesity alone. Another 13% are considering it in the future.
Other expensive drugs for disease states are also on the rise.
Employers will look to rein in costs by going back out to bid and demanding transparent pharmacy relationships.
Employers may also rein in the use of GLP-1s.
To truly stabilize cost increases for employer coverage, employers should be able to receive the negotiated prices from Medicare drug price negotiations.
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Resources
The Healthcare Labyrinth: A Guide to Navigating Health Plans and Fixing American Health Insurance