Understanding the drivers of rising health care costs

For many nonprofit leaders, making decisions around health care support represents some of the most complex financial and workforce considerations they face today. Health care costs influence more than premiums — they can impact long-term planning, organizational strategy, and sustainability.

As health care spending continues to rise, many Floridians rely on employer-sponsored coverage to access medical care, meaning the pressures on the overall health system are widely felt.  According to the Centers for Medicare & Medicaid Services (CMS), national health expenditures grew 7.2% in 2024, reaching $5.3 trillion — and accounting for 18.0% of Gross Domestic Product (GDP).¹ CMS projects that health spending will continue to grow faster than the overall economy in the coming decade.² For nonprofit organizations operating within defined budgets, even moderate increases can create profound ripple effects.

When employees lack access to affordable care, they’re more likely to delay treatment, experience worsening health conditions, or face financial strain — all of which can affect attendance, productivity, and retention. Recognizing what drives costs helps leaders shift from reacting to increases, toward making informed, strategic benefit decisions.

Key forces shaping health care costs

Health insurance costs are not driven by a single factor — they reflect a broader ecosystem of interconnected cost pressures that shape what organizations and individuals pay. Understanding these trends is key to seeing where you as a leader can have the most meaningful impact in your organization’s health care benefit strategy approach. Some key cost drivers are:

Delayed preventive care[CW1] ³
When routine screenings or checkups are postponed — often due to cost concerns — manageable conditions can escalate into more serious and expensive medical events. Prevention and early intervention improve outcomes and help reduce avoidable long-term spending.

Chronic health conditions
Chronic and mental health conditions play a significant role in overall spending. The Centers for Disease Control and Prevention reports that 90% of the nation’s annual health care expenditure is incurred by people living with chronic and mental health conditions.⁴ Ongoing treatment, medication management, and specialist care contribute to growing cost across the system.

Prescription drug spending
Pharmacy costs, particularly for specialty medications used to treat complex and chronic conditions, continue to rise. Although a relatively small portion of individuals rely on these therapies, they can account for a substantial and growing share of overall health plan spending and influence renewal outcomes.

Emergency room utilization [CW2] 
Emergency departments remain among the most expensive care settings. Limited access to primary care or delayed treatment often results in higher-cost visits that may have been preventable with earlier intervention.

Leadership awareness makes a difference

Although many cost drivers originate within the broader health care system, nonprofit leaders can still impact how workforce health is supported within their organizations.

Leaders don’t need clinical or insurance expertise to influence outcomes. Awareness, communication, and thoughtful planning can help organizations better support employees while managing long-term affordability. Encouraging preventive care, sharing available resources, periodically evaluating benefit structures, and aligning workforce strategies with financial realities are practical steps that can improve both outcomes.

Moving toward sustainable decisions

Rising health care costs may feel shaped by forces beyond organizational control. But with the right leadership response, these pressures can influence workforce stability and financial sustainability.

When employers, employees, brokers, and health plans work collaboratively to improve access and understanding, nonprofit organizations are better positioned to manage affordability while supporting a healthier workforce. Ultimately, clarity around health care cost pressures allows leaders to make more deliberate decisions that strengthen both their workforce and their mission.

Health care decisions increasingly intersect with employee wellbeing, stewardship, and mission continuity. Whether an organization currently offers benefits or is evaluating future options, greater visibility into cost drivers allows leaders to approach these decisions with clarity and confidence.

If you have questions, Ana Castellanos serves as a resource for nonprofit leaders seeking additional insight into workforce health trends and health care cost considerations. Contact her today at ana.castellanos@bcbsfl.com.

Sources

¹Centers for Medicare & Medicaid Services, “National Health Expenditure Data: NHE Fact Sheet,” last modified February 5, 2026, https://www.cms.gov/data-research/statistics-trends-and-reports/national-health-expenditure-data/nhe-fact-sheet

²Centers for Medicare & Medicaid Services, “CMS Releases 2023–2032 National Health Expenditure Projections,” June 12, 2024, https://www.cms.gov/newsroom/press-releases/cms-releases-2023-2032-national-health-expenditure-projections

³ “Getting More Value from Preventive Care.” Florida Blue, https://www.floridablue.com/employer/healthcare-industry-insights/getting-more-value

⁴Centers for Disease Control and Prevention, “Fast Facts: Health and Economic Costs of Chronic Conditions,” updated August 8, 2025, https://www.cdc.gov/chronic-disease/data-research/facts-stats/index.html

Disclaimers

Health Benefit Plans have limitations and exclusions. Driven by its mission of helping people and communities achieve better health, Florida Blue serves more than 6 million members across the state. Headquartered in Jacksonville, Fla., Florida Blue, a trade name of Blue Cross and Blue Shield of Florida, Inc., is an Independent Licensee of the Blue Cross and Blue Shield Association. For additional information about Florida Blue, please visit www.floridablue.com or call (877) 352-5830.
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 [CW1]Preventive Care Article https://www.floridablue.com/employer/healthcare-industry-insights/getting-more-value

 [CW2]ER article: https://www.floridablue.com/employer/healthcare-industry-insights/cost-of-misdirected-care-for-employees