An Aon plc news release forecasts that U.S. employers will pay 8.5 per cent more for employee healthcare plans in 2024, taking the average cost beyond $15,000 per employee.
Plan prices represent the employer’s and employee’s combined payments for medical and prescription drug costs but exclude employee out-of-pocket payments.
Aon says the projections are nearly double the 4.5 per cent increase seen in 2022–2023, assuming employers do not implement employee cost-sharing increases or other cost-saving strategies.
On average, budgeted healthcare plan costs were $13,906 per employee in 2023, based on Aon’s Health Value Initiative database, which captured information for more than 800 U.S. employers representing approximately 5.6 million employees.
Companies can blame inflation as one reason for the increase, but Aon says there are other cost drivers, too.
“Other contributing factors adding pressure on health care cost trends are the proliferation of newly indicated weight loss drugs, new technologies, severity of catastrophic claims and increasing share of specialty drugs,” says Debbie Ashford, the North America chief actuary for Health Solutions at Aon.
Since the COVID-19 pandemic, employers have seen the medical claims experience return to typical levels of growth, according to Aon.
“High-cost claimants are one of the largest drivers of health care expenses for employers, and this group of members is growing," says Farheen Dam, North American health solutions leader at Aon. “This growth is caused by several factors, including new high-cost injectable drugs, increasing cancer rates and longer hospital stays resulting from multiple conditions, complications and complex procedures. On the other hand, reinsurance premiums are climbing, making it harder for employers to hedge the elevated claim risk.”