US employers to see biggest healthcare cost jump in a decade in 2024

investing.com:

By Leroy Leo and Khushi Mandowara

(Reuters) — U.S. employers are bracing for the largest increase in health insurance costs in a decade next year, according forecasts from healthcare consultants, but workers may be somewhat spared this time around in a tight labor market.

Benefit consultants from Mercer, Aon (NYSE:AON) and Willis Towers Watson (NASDAQ:WTW) see employer healthcare costs jumping 5.4% to 8.5% in 2024 due to medical inflation, soaring demand for costly weight-loss drugs and wider availability of high-priced gene therapies.

A survey conducted by Mercer, a unit of Marsh McLennan (NYSE:MMC), found over two thirds of employers either do not plan to shift any cost increase to their staff or will pass on less than the expected rise in 2024.

«They don't want to add more financial stress on employees who are also coping with inflation, especially in this time where they're really relying on their health benefits as a way to keep employees working for them,» said Beth Umland, Mercer's director of health & benefits research.

U.S. consumer prices accelerated 3.7% in the 12 months through August, down from a peak of 9.1% in June last year. However, medical cost increases usually lag general inflation as contracts between insurers and hospitals for the prices of procedures are signed months or even a year in advance.

Benefit consultants help design insurance plans for medium and large employers. About two-thirds of U.S. workers receive benefits through such plans.Insurers UnitedHealth (NYSE:UNH), Centene (NYSE:CNC), Cigna (NYSE:CI) and Elevance, which manage employer insurance plans, declined to comment for this story.

Of its projected 8.5% increase in employer healthcare costs for next year, Aon anticipates 1 percentage