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Despite their best efforts to slow cost growth, U.S. employers are bracing for an expected 5.4% increase in worker health care costs in 2024. This estimate suggests that last year’s high inflation and labor shortages in the health care industry have pushed costs higher, which contributes to higher health benefit costs, according to Mercer’s National Survey of Employer-Sponsored Health Plans 2023.

“In addition to the effects of recent inflationary pressures, health benefit costs are rising from the consolidation of health systems and the introduction of ultra-expensive gene and cellular therapies,” said Sunit Patel, the company’s chief actuary for health and benefits. “This year, we’re also starting to see the impact of a sudden jump in utilization of costly GLP-1 drugs being used to treat diabetes and obesity.”

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