Infographic

Another Year of Increasing ESI Costs

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As open enrollment approaches for those with employer-sponsored insurance (ESI), this week’s graphic dives into some of the challenges facing the ESI market. Despite many employers’ planned cost-reduction measures, the average benefit cost per employee is projected to increase by nearly 6% in 2025. Although general inflation is a prominent contributor to this growth, ESI cost increases have outpaced inflation nearly every year for more than a decade. This trend is largely due to rising unit prices and prescription drug costs as well as employers’ limited market power in contract negotiations. Amid this pressure, interest in value-based care strategies is expanding despite slow uptake. About one third of employers are utilizing at least one value-based care strategy and up to a third more want to add at least one of these measures to their plans. Employers may be signaling a shift to more sophisticated value-based strategies, but one of the most common responses to ESI cost growth so far has been to steer employees toward high-deductible plans, which are becoming increasingly unaffordable for workers.

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Gist ESI graphic
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