Employers Express Concern Over Rising Healthcare Costs, Citing Specialty Medications Like GLP-1s: Report

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A new report from global insurance brokerage, risk management, and consulting firm Arthur J. Gallagher & Co. details how well employers in the U.S. believe that they are effectively managing their healthcare costs.¹ Due to a variety of factors, such as rising health plan premiums, medical services, and specialty drugs, only about half of the employers surveyed said they felt that they were effectively managing these costs.

According to Gallagher, one of the main areas of concern is the cost of GLP-1 drugs, which have recently become very popular for people looking to lose or manage their weight.

In a press release, Gallagher’s CEO of its benefits and HR consulting division William F. Ziebell said, “The advantages of new treatments for obesity and excess weight are evident, but the significant cost associated with these medications cannot be ignored. Employers that successfully navigate this challenge tend to take a mindful approach to their benefits design. For example, they may require an employee clear a body mass index threshold and actively participate in an employer-sponsored wellbeing program before they cover GLP-1 prescription costs. A holistic strategy, such as this, will likely result in better outcomes, as well as improved employee engagement."

Ziebell continues, “It's important for decision-makers to understand the diverse needs of their workforce and use this as a guide to create a benefits offering that will appeal to them. Where many employers fall short is by failing to communicate when and how to use specific benefits, and their value. By ensuring that employees are well-informed and equipped with the necessary information to utilize their available benefits, employers can improve employee engagement and bolster retention."

While the cost of health insurance is a significant concern for business owners, it’s also worth noting that business owners seem to be concerned about insurance costs in general. In August of last year, Gallagher released the details of a report that covered wider insurance concerns.² According to that report, business owners were concerned about specific events that could cause serious financial harm to the business. Many business owners expressed a desire for more coverage, despite that extra cost.

In a press release issued at the time, Gallagher’s CEO J. Patrick Gallagher, Jr. said, “Our goal is to position our clients for success, always striving for the best solutions, whether they be disaster recovery, employee wellness or claims outcomes. The findings from this survey are proof points of what we hear every day in speaking with our clients: 'These are my fears, how can you help?' We provide tailored risk management for their specific needs to instill confidence and offer the peace of mind business owners need to navigate the complexities of today's business environment."

He continued, “The big take-away from this survey is just how much insurance can help business owners. At the end of the day, business owners worry about how their business can support their family. Gallagher understands that–we are a family-driven business, and we work with companies of all sizes to lessen risk and make sure owners can continue operating and ultimately, providing for their families.”

Sources

1. GLP-1s, Surging Medical Costs Have Employers Taking a Hard Look at the Return on Investment. Gallagher. July 30, 2024. https://www.prnewswire.com/news-releases/glp-1s-surging-medical-costs-have-employers-taking-a-hard-look-at-the-return-on-investment-302209513.html
2. New Gallagher Study Reveals Business Owners are Looking for Tailored, Increased Insurance Protection. Gallagher. August 8, 2024. Accessed July 30, 2024. https://www.prnewswire.com/news-releases/new-gallagher-study-reveals-business-owners-are-looking-for-tailored-increased-insurance-protection-301895817.html