Healthcare Cost Trends: Mid-Year 2024

We're halfway through 2024, and cost trends are coming into focus. Here's what the data shows about healthcare cost trajectories.

The Numbers

Healthcare cost growth in 2024 is running at 6-7% for most employers—consistent with recent years but still elevated compared to pre-pandemic norms.

What's driving costs:
• Specialty pharmacy, particularly GLP-1 medications
• Provider rate increases reflecting labor costs
• Utilization at or above pre-pandemic levels
• High-cost claimants driving tail risk

What's providing relief:
• Telehealth reducing some unnecessary ED visits
• Better chronic disease management programs
• Biosimilar adoption (where available)
• Site-of-care optimization initiatives

Specialty Pharmacy Impact

Specialty drugs continue to dominate cost conversations:

• Representing 50%+ of pharmacy spend for many employers
• New high-cost therapies launching regularly
• GLP-1s creating an entirely new cost category
• Biosimilars offering savings but adoption is uneven

Managing specialty pharmacy is no longer optional—it's essential.

GLP-1 Reality Check

Employers who added GLP-1 coverage are seeing real impacts:

• Utilization growing faster than many projected
• Per-member costs significant ($12,000-$18,000 annually)
• Long-term adherence patterns still unclear
• Coverage decisions being revisited in some cases

The GLP-1 story is still being written.

Self-Funded vs. Fully-Insured

Experience differs by funding arrangement:

Self-funded employers:
• Greater cost visibility
• More levers to manage costs
• Variable experience based on claims
• Stop-loss costs increasing

Fully-insured employers:
• Renewals running 6-8% on average
• Less visibility into what's driving increases
• Dependent on carrier's book of business
• Some market variation by carrier and region

Looking to 2025

Early renewal indications suggest 2025 will see similar trends:

• Mid-to-high single-digit cost growth
• Continued specialty pharmacy pressure
• GLP-1 impact becoming clearer
• Mental health utilization increasing

Employers should plan for sustained cost pressure and develop proactive management strategies.