What’s going on in the industry so far this year? Activate Health is here to fill you in. We’ve compiled a recap of trends, updates and outlooks impacting key stakeholders like health plans and B2B health tech providers.
In such a dynamic space, this list is by no means exhaustive. Those familiar with the pace of change in healthcare know that certain projections or speculations won’t necessarily shape the remainder of the year. But we have a deep passion to help our clients prepare for what’s ahead— whether it’s rising healthcare costs, shifts in primary care delivery, or advancements in data standardization. Here’s the latest:
HEALTHCARE COSTS
Medical, dental and vision coverage are all expected to rise in 2025, but outpatient prescription drug prices are expected to exceed them
The 2025 Segal Health Plan Cost Trend Survey highlights projected increases in various health plan costs. The biggest rise is expected in outpatient prescription drug costs, with a 11.4% increase, driven by higher-cost brand drugs and specialty treatments. PPO/POS plans are projected to see a 7.9% per-person cost trend, while specialty drug costs are expected to increase by 13.3%. Other notable trends include a 4.5% increase for dental provider organizations, 3.0% in vision plans, and medical costs rising for Medicare Advantage PPO plans by 4.9% and 8.9% for Medicare Part D.
Medicaid spending on 12 select drugs could amount to over $29 billion in 2026
The Medicaid gross spending on 10 selected diabetes drugs and two selected weight loss drugs totaled over $9 billion in 2023, according to a report from the Department of Health and Human Services (HHS). This is an increase of 540% from 2019. If spending continues at a similar rate, we could see an increase of $20 billion in spending in two years—reaching a spend of $29 billion in 2026.
Many insurers and self-funded employers will make changes to their GLP-1 drug coverage policies in 2025
Coverage for high-cost weight loss medications are getting axed from many self-funded employers and insurers effective Jan. 1, 2025 These include Independence Blue Cross, Kaiser Permanente, Blue Cross Blue Shield Michigan and Allina Health. This is the case for patients using a GLP-1 strictly for weight loss, and not those who require the drug to treat conditions such as Type 2 diabetes or cardiovascular disease.
Premiums could increase substantially if ACA subsidies expire after 2025
According to a new analysis from the Congressional Budget Office (CBO), after Affordable Care Act (ACA) plans expire in 2025, without an extension, there would be a 4.3% increase in gross benchmark premiums. Without subsidies being extended permanently, these benchmark premiums could rise by 7.7% in 2027.
Naming these because I believe it’s helped get our older blogs traction since they mention big names like these.
HEALTHCARE DELIVERY
Primary care is shifting in 2025 as nontraditional models continue to gain market share
Payer-owned primary care is expected to capture 20% of the market by 2030, according to Bain & Company’s new study. This new landscape will depend on which providers can adapt to the evolving competitiveness of primary care.
Collaboration across healthcare systems will be essential in standardizaing data for value-based care
Effective value-based care relies on robust population health management This, in turn, depends on standardized data to ensure consistency and interoperability across various healthcare systems. Panelists at the Payer + Provider Summit emphasized that, while data standards are essential for integrating information from multiple sources, challenges persist in their implementation due to healthcare’s inherent fragmentation. Collaborative efforts among payers, providers, and other stakeholders are crucial to establishing and adopting these standards to enhance data trustworthiness and operational efficiency.
HEALTH SYSTEMS
A majority of healthcare systems and plans believe revenue will grow, followed by greater profitability in 2025
The gap between financially successful hospitals and those that are struggling is widening. This is evident from the results of a poll from Deloitte’s Center for Health Solutions; 69% of the 80 C-level leaders polled anticipate revenue growth and 71% expect increased profitability.
HEALTH PLANS
ICHRA ‘cash-for-coverage’ plans grow in popularity
Individual Coverage Health Reimbursement Arrangements (ICHRAs) are experiencing significant growth, with adoption increasing by 29% in 2024. Notably, companies with 50 or more employees have seen an 84% surge in adoption since 2023, indicating a shift towards personalized employee benefits. This trend is expected to continue. Projections estimate that 2 million people will be covered through ICHRAs by 2032.
Health insurance costs will likely rise in 2025 due to growing market concentration among fewer insurance companies
A recent U.S. Government Accountability Office (GAO) report highlights a trend of increasing market concentration in private health insurance from 2011 through 2022, with a small number of insurers dominating enrollment in individual, small-group and large-group markets. This consolidation is associated with rising insurance premiums, potentially reducing consumer access to affordable health coverage.
The AMA is advocating for changes to the broken PA process
Despite a high success rate—over 80%—for prior authorization (PA) appeals, only 18% of physicians consistently challenge denials. Barriers include skepticism about appeal success (62%), time constraints (48%) and immediate patient care needs (48%). The American Medical Association (AMA) highlights that the administrative burden of PAs leads to care delays, with 13% of physicians reporting serious adverse events due to these processes.
HEALTH TECHNOLOGY
Healthcare leaders and analysts project AI technologies will remain a focus in 2025
Artificial intelligence (AI) is poised to significantly influence healthcare in 2025, with anticipated advancements in both operational efficiencies and patient care. Healthcare leaders project that AI will enhance business operations, streamline administrative tasks and support clinical decision-making. The integration of generative AI technologies is expected to provide tangible value, moving beyond experimental applications to practical implementations that improve healthcare delivery. Staying ahead of AI developments will be crucial for payers to maintain competitiveness and collaborate effectively with providers in delivering value-based care.
Telehealth is approved through March 31, 2025, but advocates are pressing lawmakers for a longer extension for telehealth and hospital at home programs
Congress has approved a short-term extension of telehealth and hospital-at-home programs through March 31, 2025, to avert an immediate lapse in services that was set to expire on December 31, 2024. Advocates, including the American Telemedicine Association, are now pressing lawmakers for longer-term extensions to provide stability for healthcare providers and patients relying on these services.
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