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Employers and their benefits advisors had no idea how good they had it in 2024.
They may have worried about health care spending that year, but growth in private businesses' overall health benefits spending fell to 5.6%, down from 10.3% in 2023, and down from an average of 5.9% for the period from 1988 through 2023.
Growth in businesses' spending on health insurance contributions or the equivalent was 6.3%. That was down from 12.2% in 2023 and the same as the average for the previous 35 years.
Micah Hartman and other actuaries with the federal Centers for Medicare and Medicaid Services have published those figures in a new paper in Health Affairs based on government data.
What it means: The current wave of health care cost increases may be so painful partly because the price increase climate in 2024 was relatively mild.
Employers now appear to be facing a much stormier environment, with Washington changing health care program rules and funding arrangements, big increases in spending on Wegovy and other anti-obesity drugs looming, and health care providers and health care facility workers resisting cost control pressure.
Nurses, for example, are striking or threatening to strike at hospitals in the New York City area and at about two dozen Kaiser Permanente hospitals.
The big picture: Businesses spent a total of $967 billion on health care in 2024, with $753 billion of that amount going toward private health insurance contributions.
Businesses also spent $159 billion on Medicare payroll taxes and $55 billion on other types of health care expenditures, such as workers' compensation bills, worksite health care services and disability insurance premiums.
Businesses accounted for about 18% of the United States' $5.3 trillion in health care expenditures.
Overall U.S. health care spending increased 7.2% between 2023 and 2024.
Per-person U.S. health care spending increased 6.1%, to $15,474.
U.S. gross domestic product, or national income, increased by just 4.3% per person, to $85,888.
Actual spending vs. projections: The actual employer health spending figures reported in the new Health Affairs paper are different than the comparable projected figures released in June 2025.
CMS then predicted that employer spending on all kinds of health care costs would increase 8%, to $966 billion.
Forecasters predicted employer spending on health insurance premiums would rise 8.9%, to $747 billion.
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