Latest news with #EllenKelsay
Boston Globe
5 hours ago
- Health
- Boston Globe
GLP-1s, cancer care are driving higher employer health care costs in 2026
Advertisement Companies' strategies for managing the ballooning costs, several experts said, will likely skew toward more aggressive scrutiny of their health insurance carriers and other third-party vendors that help them manage costs, and finding alternatives, if necessary. The higher costs raise the prospect of higher insurance premiums and deductibles for workers, though Ellen Kelsay, CEO of the Business Group on Health, said companies will try to shield employees as much as they can. Kelsay called passing costs on to employees 'a Band-Aid approach' that doesn't fix the long-term cost dynamics. 'Employers are still going to be absorbing 90-plus percent of the health care costs,' Kelsay said on a call with reporters. 'They are still going to do their level best to absorb as much of this cost increase as possible.' Advertisement The 9 percent projected median increase is up from an estimated 8 percent this year and reported increases of 7.5 percent in 2024 and 6.8 percent in 2023. Even if workers don't foot the higher costs directly, the climbing costs of health care can limit the growth of their wages over time. The 9 percent increase is on par with other projections. Last week, the The biggest culprit for higher costs in the Business Group on Health survey is increased use of blockbuster GLP-1 drugs for obesity and diabetes, sold under the brand names Wegovy, Ozempic, Zepbound, and Mounjaro. About 80 percent of respondents to the survey said they've seen an uptick in the use of those drugs, and another 15 percent said they anticipate a future increase. To mitigate GLP-1 expenses, the survey found that the number of employers who cover them for conditions other than diabetes will stagnate. Currently, 99 percent of employers surveyed cover them for diabetes and 73 percent cover them for obesity. Only 6 percent of employers said they had dropped coverage for obesity. Employers that cover GLP-1s for obesity said they'll put more hurdles around their use, such as requiring prescriptions from specific providers and requiring users to participate in weight management programs. Such utilization management tactics are already common. The survey found 90 percent of plans require prior authorization and 54 percent require workers to participate in weight management programs. Advertisement Cancer was the top condition driving employers' health care costs for the fourth year in a row, as diagnoses become more prevalent and the cost of treatment rises. Almost 90 percent of employers said cancer was among the top three conditions costing them the most in 2025, up from 80 percent last year. About half of employers plan to steer their workers toward specific cancer centers that offer quality services at lower costs, known as centers of excellence, in 2026, and another 23 percent will consider doing so by 2028. Other conditions were less likely to show up in employers' top three lists for costs. Diabetes dropped from 28 percent in 2024 to 21 percent in 2025. Musculoskeletal conditions dropped from 74 percent to 71 percent and cardiovascular conditions dropped from 40 percent to 35 percent. Almost three-quarters of employers said their workers are seeking out mental health and substance use disorder treatment at higher rates, and another 17 percent anticipate future increases. Another area that's driving higher spending is more coverage for women's health needs. Next year, 58 percent of employers said they plan to expand preventive care for women, an increase of 22 percentage points in two years. Almost 60 percent of employers said they'll provide menopause support services next year, up from 28 percent in 2024. Other services are also on the rise. In 2026, 36 percent of employers will cover doula services, 55 percent will cover services to treat postpartum depression, and 43 percent will cover initiatives to support high-risk pregnancies in under-resourced populations. Robert Andrews, CEO of the Health Transformation Alliance, a coalition of about 80 self-insured employers that cover 5 million people, said that while he hasn't done a formal survey, he's hearing that costs are rising 7 percent to 9 percent at the median. That said, some of his group's members have kept costs flat. The latter are companies that are aggressive about auditing claims and not paying erroneous, fraudulent, or otherwise inflated claims. Advertisement Another piece of advice Andrews gives members is to carefully review their agreements with carriers. 'Watch your carrier very closely, audit the carrier, make sure you're getting the deal that you bargained for,' he said. Andrews also recommends companies put a cap on out-of-network charges for employees who have to get care at out-of-network hospitals. Not only that, make sure the insurer is actually enforcing the cap, because often it's not, he said. One of the Business Group on Health's members is Delta Airlines, where the cost increases are consistently in the low single digits, said Henry Ting, the company's chief health and wellness officer. 'That's not just an accident or by chance,' said Ting, a cardiologist who worked at Mayo Clinic for over two decades. 'We do take a lot of actions to make sure we're delivering the best value.' Delta's approach to keeping health insurance costs down Delta has collected over 10 billion de-identified records from its 100,000 employees and their dependents and used it to see where the high costs are. One revelation was that a significant percentage of cancers among employees were diagnosed because of symptoms and not through screening tests. Those people also tended to have more advanced disease. Delta now has a 'Living Well with Dr. Henry' series for employees in which Ting educates people on screenings. Advertisement 'Then we make it easy for them to schedule those appointments without a lot of friction,' Ting said. 'I'd like to have 99 percent of our cancers diagnosed on a routine screening test rather than feeling a lump or pain or bleeding.' The Commonwealth Fund last year convened a One of the task force members is Paul Fronstin, who serves as director of health benefits research at the Employee Benefit Research Institute. When it comes to strategies for cutting down on costs, Fronstin said he thinks employers will scrutinize vendors, make changes to plan designs and networks, and use so-called point solutions, which are vendors that help patients manage specific conditions, like type 2 diabetes or mental health conditions. But with unemployment still at record lows, Fronstin thinks retention will be front of mind for employers, making them hesitant to shift costs onto employees. 'We've seen in the past that employers haven't increased premiums,' he said, 'or to the degree premiums have gone up for employees, they've gone up in proportion to what the employer pays.'
Axios
16 hours ago
- Business
- Axios
Workers to bear brunt of health cost increases in 2026
Big employers who've tried to insulate workers from rising health costs are preparing to share the pain next year in the form of higher premiums to reflect year-over-year increases of as much as 10%. Why it matters: The added costs will hit workers already reeling from inflationary pressures and reflect a change in thinking for corporations that have tried to maintain generous benefits in tight labor markets. "The story this year is perhaps more daunting and sobering than it ever has been," Ellen Kelsay, CEO of Business Group on Health, said on Tuesday. By the numbers: A survey the group released of 121 large employers insuring 11.6 million people found companies' medical costs sharply outpaced their expectations over the past two years. They are now projecting health costs to jump a median of 9% next year absent any cutbacks in benefits to offset the increases. Employers in Mercer's annual survey forecast a more modest 5.8% increase next year while a separate survey from the International Foundation of Employee Benefit Plans projected a median increase of 10%. Between the lines: The cost pressures in some ways mirror the experience in Affordable Care Act and other insurance markets that have seen costs surge on higher demand for health procedures and tests and rising drug costs. Cancer is the top driver of employer health costs for the fourth year in a row, as diagnoses increase and treatment costs grow, according to the Business Group on Health survey. Employers have also expressed concerns about pricey biologic drugs, anti-inflammatory specialty drugs and the soaring demand for GLP-1s for obesity. In 2024, pharmacy expenses accounted for nearly a quarter of all employers' health care spending (24%), and the companies project an increase of 11% to 12% next year, per the Business Group on Health. Employers appear much more reluctant to eat higher benefit costs. Mercer found 51% said they would be shifting costs to employees this year, up from 44% last year. "What we had been seeing in the data for quite a few years is employers really not doing a lot of cost-shifting," said Beth Umland, Mercer's director of research for health and benefits. "As we are entering our third year of elevated cost trend, employers are like, 'All right, we got it. We got to readjust this.'" They'll also scrutinize other employee health perks. "Employers are going to do some things much more aggressively ... in terms of holding their vendors accountable and exploring alternatives, because passing cost increases is a Band-Aid approach. It does not fix the long term," Kelsay said. What to watch: Nearly one-quarter of large employers will have alternative health plan arrangements in place next year, and another 36% are considering them for the future, per the Business Group on Health. Your employer might even introduce what they call a "high performance network" or "exclusive provider organization" this year. They sound suspiciously like the HMOs of old as they offer much narrower networks for participants, in exchange for lower rates. But they have key differences. For instance, patients have better tools and data at their disposal via apps on their phone to compare providers' cost and quality. "They are also, for the most part, avoiding the primary care physician gatekeeper feature. That's the HMO feature that just kind of turned out to be a lightning rod for a lot of people," Umland said. Zoom out: While the funding cuts and enrollment restrictions on public health insurance programs included in the GOP's tax-and-spending bill don't directly affect employer-sponsored health coverage, they'll likely have ripple effects. Two-thirds of employers surveyed by Business Group on Health reported being concerned about cuts to Medicaid and Medicare.
