Employer-sponsored health care costs are expected to increase as insurers and employers face rising medical expenses and greater use of health services, according to a recently released study from health care research and policy firm KFF.
The study identifies several factors contributing to higher costs. Prices for medications, physician services, testing, and other medical care continue to rise, while increased utilization is also putting pressure on health plans. Insurers have also reported greater use of behavioral health services compared with previous years.
The study points to changes in enrollment patterns as another factor. Some smaller employers are moving toward lower-cost plans, particularly when they have younger workforces. As enrollment shifts, the cost of coverage can increase for groups that continue to offer more comprehensive plans.
Specialty drugs and biologics are also contributing to higher spending. Many newer treatments have limited or no generic alternatives, keeping costs elevated as their use expands.
Weight-loss medications, including GLP-1 drugs, are another area of increased attention. While many health plans limit coverage of these medications to conditions such as diabetes, their growing use and relatively high prices continue to affect health care spending.
Approximately 165 million Americans receive health coverage through an employer, although costs and coverage vary significantly among employers and plans. The study indicates that workers and employers across the country, including in Washington, should expect noticeable increases in health plan costs in the coming year.
Washington Retail Association (WR) is closely watching these trends and looking for practical solutions to help members manage rising health care costs. As health care remains a significant expense for employers, WR will continue exploring ways to support retailers and advocate for policies that help make coverage more affordable and sustainable for businesses and their employees.
