Employer-sponsored health insurance is already incredibly expensive, and all signs are pointing to another significant increase in costs next year.

Why it matters: I've written some version of this sentence many times over the last few years: At some point, paying tens of thousands of dollars for each worker's health insurance every year has got to become something employers just won't do anymore.

• And that's when things will get interesting, because if there's any group large and powerful enough to force actual changes to the health care system, it's the employer community.

Driving the news: KFF released its annual employer health survey this week, with its top-line finding that annual family premiums were more than $25,000 this year.

• But to be honest, we're all used to seeing numbers like that when we talk about employer insurance! So what was more interesting to me than the number itself was the framing that KFF included in its news release:
• "Employers are shelling out the equivalent of buying an economy car for every worker every year to pay for family coverage," KFF president and CEO Drew Altman said (emphasis mine). "In the tight labor market in recent years, they have not been able to continue offloading costs onto workers who are already struggling with health care bills."
• Remember, the U.S. pays way more for health care than any other wealthy country in exchange for worse outcomes, and commercial prices are much higher than those paid by Medicare or Medicaid.

Zoom out: So that's 2024, but a host of other projections over the last few months have consistently predicted even higher prices in 2025.

• PwC has predicted an 8% cost increase in the group market (and a 7.5% increase in the individual market), driven by inflation, prescription drug spending and high use of behavioral health.
• Mercer has projected health benefit costs per employee will rise by 5.8% — but that's after employers' cost-reduction actions. Without those actions, costs would rise by about 7% on average, with small employers hit hardest.
• And a recent survey by the International Foundation of Employee Benefit Plans found costs will increase by a median of 8%, driven most by catastrophic claims, expensive prescription drugs and medical provider costs.

The big picture: Some of these cost increases are reflecting inflation, which providers initially bore the brunt of but have now had time to pass on to insurers through price negotiations. And some of the cost increase is due to higher demand for care.

• But some of this is just the cost of innovation. Every time you hear about promising new drugs, remember that those aren't free — and none come up in these cost projections as much as GLP-1s, the new class of anti-obesity drugs.
• And that's in today's coverage environment, where usage is pretty restricted because of the cost. If employers open up access without some significant price reductions, that will undoubtedly drive overall plan costs even higher.

My thought bubble: Employers and their workers are increasingly shouldering the cost of the world's most expensive health care system, and the gap between what the government pays and what they pay continues to widen.

• But remember what Vitals told you yesterday that Mark Cuban said about large employers, which is worth repeating: "They have no idea what they're doing with health care and so they defer to somebody who defers to somebody else."

Change may look a lot less like a breaking point than incremental decisions to buck the traditional system. And if that's the case, some employers may already be there.

"Everybody's always looking for the tipping point. I think what's more likely is you have employers increasingly engaged," said Dan Mendelson, CEO of Morgan Health, which focuses on new care models as a way of improving employer health coverage.

• He said employers are seeking "alternatives to standard insurance products."
• "So instead of going out and paying a broker to buy what is essentially a fee-for-service insurance product, employers are increasingly looking for curated networks, better ways to help their employees navigate, enhanced primary care to help manage downstream costs," he said.

The big picture: Employers, of course, still have tools like increasing employees' share of costs, implementing narrower provider networks or higher use of prior authorization.

• But those tools aren't popular with employees, which becomes a problem when the labor market is tight.
• Employee cost-sharing has also become a problem in general; 43% of respondents with employer coverage said they find it somewhat or very difficult to afford their health care, according to a survey by the Commonwealth Fund last year.

The intrigue: The fear of lawsuits could also be a powerful force, albeit a less pleasant one.

• Workers have begun filing lawsuits in an attempt to hold their employers accountable for the deals they cut with health insurers, pharmaceutical middlemen and other benefits administrators, my colleague Tina Reed has reported.

What we're watching: This all could end up tying in with next year's huge expected tax debate. Why? Because the employer-insurance tax exclusion is worth hundreds of billions of dollars annually, and arguably, depending whom you ask, encourages costs to keep on growing.

• That could very well make it a target for lawmakers, and that would be a huge deal for employers.

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