As employers face rising costs, many are looking to rethink plan designs rather than emphasize shifting expenses to workers, according to a new WTW report.
WTW released its 2024 Best Practices in Healthcare Survey on Thursday, which polled 417 employers representing 6 million workers. It found that these firms are expecting costs to balloon by 7.7% in 2025, compared to an increase of 6.9% in 2024 and 6.5% for 2023.
Despite the increase, however, only 34% told WTW that they intend to shift those costs to employees by raising premiums. Twenty percent said they will push high-deductible health plans or account-based coverage to address costs.
Instead, 52% said they intend to roll out programs that reduce total costs, and 51% said they would use plan designs and network models to steer workers to lower-cost and higher-quality providers.
“The cost of healthcare has been rising steadily for years. With cost increases reaching a post-pandemic high, companies are concerned about the burden it’s putting on their workforces, especially since it affects decisions about insurance coverage and care,” said Tim Stawicki, chief actuary for health and benefits at WTW, in the release. “To tackle high prices and other causes driving increased spending, companies are pursuing initiatives that are beyond cost-shifting.”
More proactive steps employers are mulling over the next years to address health costs include putting vendor and insurance contracts out for bid, cited by 43% of those surveyed. In addition, 38% said they plan to evaluate mental health offerings and employee assistance programs, while 30% said they are planning for narrow networks.
A quarter said they are mulling centers of excellence, according to the survey.
Efforts to address costs don’t stop with the medical benefit, either, the survey found. Twenty-one percent of those surveyed said they are considering or planning to offer direct-to-consumer delivery prescription options or drug discount cards.
Nearly 1 in 5 (18%) said they anticipate allowing members to buy drugs through a “cost plus” outlet or retail, while 17% said they expect to be in an acquisition cost contract structure with their pharmacy benefit manager.
Employers identified several key areas of focus for cost management, including obesity and diabetes (40%), cancer and oncology (34%), cardiovascular health (28%) and women’s health (27%).