Increasing Costs of Employer-Provided Coverage May be Passed on to Employees

By Consumers for Quality Care, on October 16, 2024

Employers are more likely to shift the costs of health benefits to employees through higher deductibles, premiums, and out of pocket costs, according to a new survey from Mercer and reported by Healthcare Dive.

Almost half of employers are planning to shift these cost increases to employees next year, including by adjusting cost-sharing provisions or raising deductibles on their health plans. Mercer expects employees to pay nearly 6 percent more in health insurance costs compared to last year. If this holds true, 2025 will be the third consecutive year employees see their health care costs grow by 5 percent or more from the previous year.

Many factors, including consolidation within the health care industry, are contributing to these health care cost increases. According to Sunit Patel, Mercer’s U.S. Chief Actuary for Health and Benefits, health care mergers are “putting pressure on pricing, as larger health systems have greater negotiating power than smaller systems.”

When health care costs rise, consumers struggle to afford care. Because of this, they are more likely to skip or delay seeking the medical care they need rather than risk going into medical debt. 

CQC remains concerned about how the increasing costs of employer-provided coverage will hurt consumers and urges both employers and providers to do what they can to keep employees from having to pay for these increases.