Employer-provided health care costs are rising due to weight-loss drugs and inflation


  • Employer – provided health insurance spending rose this year as inflation and weight-loss drugs drove up costs, study concludes.
  • The health consulting firm human resources Mercer found that the average cost per employee in the United States for health coverage increased 5.2% to nearly $15,800 in 2023.
  • Mercer said that The increase in pharmacy costs was due to the growing demand for drugs to help patients lose weight.

Growing demand for weight-loss drugs and general inflation have driven up average employer-provided health care costs in the United States this year, according to a new survey.

Research by Marsh & McClennan-owned human resources consulting firm Mercer (MMC) found that the average per-employee cost of health coverage was 5.2% higher, at $15,797. The company noted that this was well above the average annual increase of around 3% recorded since 2012. The cost of coverage increased by 3.2% in 2022.


Along with inflation, health care costs have been driven this year by a sharp increase in spending on prescription drugs, with spending on pharmacy benefits increasing 8.4%, Mercer found. An “increase” in the use of glucagon-like peptide 1 (GLP-1) drugs to treat diabetes and obesity, such as those from Novo Nordisk's (NVO) Ozempic and Wegovy, “has had a significant impact on costs.

The high price of these drugs, and the large number of patients who could benefit from them, “can result in a substantial new net cost to a health plan,” Mercer said. Since they are maintenance drugs, insurers could pay for coverage over many years, the company said.

Sunit Patel, Chief Actuary of health coverage at Mercer, pointed out that the company's survey showed that employers expected the cost of health coverage to increase another 5.2% in 2024. It is Employers are likely to continue paying more as it may take a few more years for price increases due to higher wages for health care workers and costs of medical supplies to affect health plan costs, a- he declared.

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Source: investopedia.com

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