U.S. Employee-sponsored Healthcare Market Analysis

U.S. Employee-sponsored Healthcare Market Analysis

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Based on service, the market is classified into healthcare and wellness. The healthcare segment dominated the market and was valued at USD 563.9 billion in 2023.
 

• Healthcare costs continue to rise, prompting employers to seek effective ways to provide coverage. For instance, according to the Kaiser Family Foundation, annual family premiums for employer-sponsored health insurance increased by 4% in 2021, reaching an average of USD 22,221.
   
• Increasing prevalence of chronic diseases such as diabetes, heart disease, and cancer are becoming more common, driving the need for comprehensive healthcare coverage. Managing chronic diseases requires ongoing medical attention and care, increasing the demand for robust health insurance plans.
   
• Employees highly value comprehensive health benefits, which are a key factor in job satisfaction and retention. Offering robust healthcare plans can enhance an employer's ability to attract and retain top talent.
   

Based on network type, the U.S. employee-sponsored healthcare market is categorized into open network plans and closed-network plans. The open network plans segment held leading revenue share of around 57.3% in 2023.
 

• Open network plans enable easier access to specialists without requiring referrals, which is a significant advantage for employees who need specialized care. This convenience and direct access to a broader network of providers drive the popularity of open network plans.
   
• Open network plans, such as Preferred Provider Organizations (PPOs) and Point of Service (POS) plans, offer greater flexibility by allowing employees to see any healthcare provider, including out-of-network providers, though at higher costs. This flexibility is highly valued by employees who seek a wider range of healthcare options.
   

Based on organization size, the U.S. employee-sponsored healthcare market is segmented into large-scale organization, medium-scale organization, and small-scale organization. The large-scale organization segment held majority share in the market in 2023 and is anticipated to reach USD 361.9 billion by the end of forecast period.
 

• Large-scale organizations typically have diverse employee populations, including different age groups, health conditions, and family structures. They require comprehensive healthcare plans that address a wide range of needs. Most of the large firms offer health benefits, with many providing extensive coverage including dental and vision plans.
   
• Large organizations are increasingly integrating advanced healthcare solutions, such as telehealth and digital health platforms, into their employee benefits packages. Moreover, large employers are increasingly emphasizing wellness and preventive care programs to improve employee health and reduce long-term healthcare costs.
   

The East South-Central employee-sponsored healthcare market accounted for USD 149.6 billion revenue in 2023 and is anticipated to grow at a healthy pace between 2024 – 2032 period.
 

• Substantial percentage of the East South-Central region is rural, where access to healthcare providers can be limited. This increases the need for employee-sponsored plans that offer broader network access and telehealth services. Telehealth has seen increased adoption in this region, driven by the need to provide healthcare access to remote and underserved areas.
   
• The high prevalence of chronic diseases in the regional states is among a key factor driving the market growth. The region has some of the highest rates of chronic diseases in the U.S., including diabetes, heart disease, and obesity. For instance, as per the 2021 data reported by The Centers for Disease Control and Prevention (CDC), Mississippi and Alabama have among the highest obesity rates in the country, at around 40.8% and 39.9%, respectively.