Rising Healthcare Costs: What Employers Are Doing to Manage Expenses, Per Mercer

By Marissa Plescia - Employers are already struggling with rising healthcare costs in 2025, and early signs suggest these challenges will persist — potentially worsening in 2026, according to Tracy Watts, senior partner at consulting firm Mercer. And it’s getting to a point where employers may have to start shifting costs to employees, she added. Read Full Article…

HVBA Article Summary

1. Rising Healthcare Costs Likely in 2026: Employers have largely avoided shifting healthcare costs to employees in recent years due to concerns about affordability. However, projections indicate that 2026 will bring even steeper increases than in 2025, making it significantly more difficult for employers to stay within budget during plan renewals.

2. GLP-1 Drugs Driving Cost Pressure: A major contributor to escalating healthcare costs is the growing use and coverage of GLP-1 drugs. While many employers added these drugs to their plans last year, some are now re-evaluating that decision and considering stricter coverage requirements to control spending.

3. Shift Toward Cost-Control Strategies: To manage rising healthcare expenses, employers are exploring alternative plan designs such as high-performance networks that emphasize quality care, variable copay plans that adjust costs based on provider choices, and Exclusive Provider Organization (EPO) plans that limit coverage to in-network providers. These strategies aim to lower both plan and out-of-pocket costs while maintaining access to care.

FTC growls at vision care providers over 'hiding' patient prescriptions

By Allison Bell - The Federal Trade Commission is trying to fight a practice that could increase claim costs at employer-sponsored vision care plans: moves by optometrists and other eye doctors to hide patients' prescriptions. The federal Eyeglass Rule and Contact Lens Rule require eye doctors to give all patients who need corrective eyewear free copies of their prescriptions whenever the doctors test the patients' vision. Read Full Article… ^{_{(Subscription required)}}

HVBA Article Summary

1. FTC Enforcement on Prescription Access: The Federal Trade Commission (FTC) is actively enforcing rules designed to ensure consumers can freely access their eyeglass and contact lens prescriptions. As part of this effort, the agency sent warning letters to 37 contact lens providers over potential non-compliance and concluded an investigation into Spectrum Vision Partners, signaling that it will continue to monitor adherence to the Eyeglass and Contact Lens Rules.

2. Market Competition Concerns: The vision care sector is facing rising concerns about limited competition and high prices, mirroring broader trends seen in the general healthcare and prescription drug markets. The role of vision benefit managers is coming under increased scrutiny, as their influence over where and how patients obtain vision products may contribute to inefficiencies and cost increases.

3. Legislative and Employer Implications: Proposed legislation in Congress aims to limit the power of vision benefit managers in controlling patient choices for eyewear, potentially reshaping the market. Employers and benefit managers are navigating a complex balance between opposing practices that restrict supply or raise costs, and avoiding protection of inefficient providers or those with disproportionately high profit margins.

Democrats introduce bill to establish a Medicare 'Part E' public option

By Paige Minemyer - Democrats in the House and Senate have introduced new legislation that would establish a "Part E" for Medicare, which would allow people to opt into the program. Reps. Jimmy Gomez, D-Calif., and Don Beyer, D-Va., on Monday put forward the Choose Medicare Act. Under the proposal, a potential Medicare Part E would have the program compete with private insurance. Democratic Sens. Jeff Merkley, of Ore., and Chris Murphy, of Conn., introduced a companion bill in that chamber. Read Full Article…

HVBA Article Summary

1. Medicare Part E would operate through insurance marketplaces and use existing ACA subsidies: The proposed bill introduces Medicare Part E, a new government-run insurance option that would be self-funded through premiums. Individuals could enroll through any state or federal health insurance marketplace, and the same subsidies available under the Affordable Care Act (ACA) would apply, potentially making coverage more affordable for a wider range of Americans.

2. Expanded access and coverage features: The plan would be open not only to individuals but also to employers who wish to offer it to their employees, expanding its reach. Medicare Part E would be required to cover all ten essential health benefits outlined by the ACA, and it would also mandate coverage of comprehensive reproductive health services, including abortion. Additional provisions include a cap on out-of-pocket costs for traditional Medicare enrollees, drug price negotiation authority, and protections against surprise medical billing.

3. Public option positioning with mixed precedent: This proposal reflects a broader Democratic initiative to establish a public health insurance option that competes directly with private insurers, aiming to increase access and affordability. While similar public options have already been implemented in some states, their effectiveness has varied, indicating both potential benefits and implementation challenges at a national level.

Many HSA Holders Withdrew More Than They Contributed: EBRI

By James Van Bramer - One-third of health savings account holders withdrew more than they contributed, despite balances ultimately increasing in 2023, according to an Employee Benefit Research Institute study. The report summarizing the study, “Health Savings Account Balances, Contributions, Distributions, and Other Vital Statistics, 2023: Evidence From the EBRI HSA Database,” was based on EBRI’s HSA Database, which comprises 14.5 million account holders. Read Full Article…

HVBA Article Summary

1. Low Investment Rates in HSAs: While Health Savings Accounts (HSAs) provide a major tax advantage by allowing investments to grow tax-free, only 15% of account holders are taking advantage of this feature by investing in assets other than cash. This suggests a significant gap in awareness or understanding of HSA investment benefits.

2. Impact of Employer Contributions: Just 43% of HSA holders received contributions from their employers. These contributions were associated with higher overall funding of the accounts and a greater likelihood that individuals would invest their HSA funds, indicating that employer support is a strong motivator for more strategic HSA use.

3. Policy and Market Implications: The report emphasizes that better understanding of HSA usage can guide improvements for multiple stakeholders. Plan sponsors, HSA providers, and policymakers can all play a role—whether through educational initiatives, product enhancements, or new legislation such as the Republican tax bill aimed at expanding HSA access and benefits.

Benefits Think: Rx remedies for making drugs more affordable

By André Wencker - Prescription drugs are generally the first step in every medical treatment and most developed countries have made a priority of granting access to secure, affordable medicines for their populations. This is done through a national agency or accredited authority that evaluates and compares medicines, negotiates prices and allows products access to the market. The process is transparent and data is made available to a large public. Read Full Article… ^{_{(Subscription required)}}

HVBA Article Summary

1. U.S. Drug Prices Are Exceptionally High Due to Lack of Regulation: U.S. drug prices are 4.5 to 4.8 times higher than in comparable countries like France and the U.K., largely because the U.S. lacks national price negotiation and comparative drug evaluation. Despite Americans funding a large portion of global drug research, they consume fewer drugs per capita and pay the highest prices.

2. Big Pharma and PBMs Drive Up Costs Through Exploitive Practices: Drug manufacturers and pharmacy benefit managers (PBMs) dominate the market and employ tactics—such as extended patent protections, high rebates, and market manipulation—to maintain inflated prices. PBMs, controlling 79% of the market, profit from opaque practices that often make medications unaffordable, particularly impacting essential drugs like insulin.

3. Employers and States Must Take Strategic Action: Employers can reduce drug costs by contracting directly with PBMs, rejecting rebate-based fee structures, and resisting the "specialty generics" pricing trick. Meanwhile, state-led initiatives, like Oregon’s constitutional right to healthcare and proposals for international reference pricing, are more promising systemic solutions than private sector efforts alone.

Sanders, senators float ban on direct-to-consumer ads for prescription drugs

By Richard Payerchin - Direct-to-consumer advertising for pharmaceuticals would be banned under new legislation introduced in the Senate. Patients would get far fewer messages to “ask your doctor” under the End Prescription Drug Ads Now Act. It would ban prescription drug advertising on television, radio, print, digital platforms and social media, said an announcement from sponsor Sen. Bernie Sanders (I-Vermont), ranking member of the Senate Committee on Health, Education, Labor and Pensions. Read Full Article…

HVBA Article Summary

1. Push to Ban TV Drug Ads: Senator Bernie Sanders, backed by a group of bipartisan co-sponsors, has introduced the End Prescription Drug Ads Now Act to ban direct-to-consumer pharmaceutical advertising on television in the United States. He argues that these ads mislead the public, fuel unnecessary demand, and contribute to rising healthcare costs, making the U.S.—alongside New Zealand—the only country to allow such practices.

2. Massive Industry Profits and Ad Spending: In 2024, the 10 largest pharmaceutical companies earned more than $100 billion in profits, while spending over $5 billion on television advertising. These commercials, which now occupy more than 30% of ad time during major network evening news programs, are seen as a major driver of consumer influence and industry revenue.

3. Skyrocketing U.S. Drug Prices: Prescription medications in the United States are drastically more expensive than in other developed countries, with examples like Ozempic and Wegovy costing over ten times more than their counterparts in Germany and the UK. Lawmakers point to this price gap as evidence of pharmaceutical industry greed and argue that misleading advertising contributes to inflated demand and price manipulation.

The great benefits pivot: How smart HR leaders are navigating exploding healthcare costs

By Tony Case - Economic pressures are forcing HR executives to fundamentally rethink their benefits strategies, moving away from the “more is better” approach that dominated the talent wars of recent years. Fresh research reveals that 90% of U.S. employers now cite rising benefit costs, including exploding expenses related to employee healthcare, as their primary strategic concern — a dramatic jump from the 67% of two years ago. Read Full Article…

HVBA Article Summary

1. Strategic Optimization Over Expansion: Employers are moving away from simply broadening their benefits portfolios and instead focusing on optimizing existing offerings. This marks a more mature and deliberate benefits strategy aimed at delivering greater value to both employees and the business in the face of rising costs and economic uncertainty.

2. Focused Investment in Core Areas: Organizations are concentrating their benefit resources on five critical priorities — mental health, core health coverage, financial well-being, family support, and value maximization. This targeted approach is complemented by strategic cost-management tactics such as switching to higher-value vendors and addressing high-cost medical conditions.

3. Enhanced Employee Experience and Engagement: Companies are investing in improving how employees access and understand their benefits through clearer communication, behavioral nudges, and personalized navigation tools. This effort is designed to drive better utilization, improve outcomes, and ultimately increase the return on investment in employee benefits.