Employee Benefits Market Check Survey: 2025 Medical Plan Cost Increase

As we prepare to conclude the year, many companies have finalized their medical plan for 2025. Costs continue to increase at a challenging rate. Some market conditions driving rate increases include provider consolidation, an increasing rate of chronic conditions, higher utilization and costs for pharmaceuticals, elevated usage of behavioral health services, and general price inflation.

We conducted a survey on December 12 to confirm the final cost impacts for employers. The results are in the charts below.

Results based on 178 employer respondents.

Medical Plan Changes Implemented For 2025

35% elected to make no changes.

Key Findings

At the beginning of the year, we asked employers what strategies they would implement to help manage their actual costs in 2024, and 60% said they were not taking specific action. With costs escalating significantly, the time to implement a specific plan is now. 2025 may be one of the more disruptive years the industry has seen in some time.

As the data above illustrates, employers are confronted with sizable premium increases, as 63% will have their medical costs rise by 4% or more in 2025 after making any changes. While it is encouraging that 35% of employers did not have to modify their plans, most were less fortunate. Increasing payroll contributions and plan design elements were the most common adjustments and were felt by all employees.

Based on headlines over the past two years, it should be no surprise that pharmacy was the #1 renewal cost driver for those employers who could pinpoint specific problem areas.  For the 33% of companies that did not know what led to their renewal increase, the opportunity to explore alternate funding and claims data tools should be on the roadmap.

Whatever strategy an employer decides to implement, it likely will not produce quick results.  Benefit leaders must be patient and allow their planning and investment time to have an impact.

Should you have any questions regarding any of this information or want to discuss your health plan costs or industry-level data, please contact your local Assurex Global adviser.