Employee Health Insurance Costs Spike 5.2% Due to Drug Prices

Health insurance expenses rose 5.2% in 2023 to reach nearly $16,000 per employee, a notable prescription drug cost-driven departure from the recent annual increases of around 3% and well above the 3% rate of general inflation, human resources consulting firm Mercer said in a new report.

Prescription drug costs are driving overall health benefit expenses, jumping 8.4%, with a spike in high-priced glucagon-like peptide 1 (GLP-1) drugs used for diabetes and obesity having a “notable impact,” Mercer said in its survey of more than 1,900 employers released Friday. The weighted results represent 123 million employees.

Costs for employer-sponsored health insurance, ...