A recent study by Aon, a leading professional services firm, has revealed that employer healthcare costs are expected to see a significant rise in 2025. The study projects a 9% increase, pushing the average cost per employee to over $16,000. This steep rise is notably higher than the 6.5% increase that businesses experienced in their healthcare budgets from 2023 to 2024, highlighting a growing financial challenge for companies.
Debbie Ashford, Aon’s North America Chief Actuary for Health Solutions, discussed the findings in an interview with FOX Business. She noted that this year’s projection comes after a period of slower growth in employer-sponsored healthcare spending during the pandemic. While much of the economy has been dealing with high inflation over the past few years—a situation that is now starting to ease—the healthcare sector experienced this inflationary pressure later. This delay is due to the multi-year nature of contracts between medical providers, insurers, and payers.
As these contracts come up for renegotiation, healthcare providers are likely to seek higher payments for their services. This increase in fees is necessary to cover the rising costs of labor and medical supplies, which have been impacted by inflation.
The analysis also pointed out that the expected increase in healthcare costs is being driven by several factors. One major factor is the ongoing rise in medical claims. Another significant contributor is the higher spending on specialty prescription drugs. In particular, the report highlighted GLP-1 medications like Ozempic and Wegovy, which are used to treat obesity and diabetes, as key drivers of these increased expenses.
Overall, the anticipated rise in healthcare costs presents a substantial challenge for employers, who will need to carefully manage their budgets to accommodate these escalating expenses.