Insurers project a global rise in medical costs in 2025, with an estimated increase of 10.4%, as reported by WTW’s 2025 Global Medical Trends Survey. In the U.S., costs are expected to rise by 10.2%, up from 9.3% this year. The surge in costs is attributed to the overwhelming strain on public healthcare systems worldwide, which have been struggling with high demand and limited resources. This has led many individuals to seek private healthcare providers for better services.
In the U.S., employer-sponsored healthcare continues to evolve, particularly in regard to the coverage of GLP-1 medications. A report from Mercer highlighted that 44% of companies with over 500 employees expanded coverage for obesity drugs, marking an increase from the previous year’s 41%. As healthcare costs rise, employers are increasingly under pressure to balance the costs of employee healthcare with their budget expectations, while still delivering value.
Linda Pham, WTW’s global health and risk leader, emphasized the ongoing challenge posed by rising healthcare costs, urging employers to adopt data-driven strategies for both business and health outcomes. This includes considering the value of health benefits and integrating data and feedback into decision-making processes. Benefits experts also stress the importance of assessing the value of specific benefits for the workforce to ensure effectiveness.
Courtney Stubblefield, WTW’s managing director of Health & Benefits, pointed out that while some factors influencing healthcare costs are beyond employers’ control, they can still take proactive measures to manage costs. These measures include exploring alternative solutions such as telehealth options, which could help mitigate rising costs while enhancing the overall value of health benefits for employees.
As employers look to respond to the increasing medical costs, they will need to navigate these rising expenses with a focus on improving both the quality of healthcare offered and the financial sustainability of their health benefits programs. By leveraging data, exploring new technologies, and considering cost-effective solutions, employers can strike a balance between cost control and delivering quality healthcare benefits to their employees.
