Employers are already fighting rising healthcare prices in 2025, and early indicators counsel these challenges will persist — probably worsening in 2026, in response to Tracy Watts, senior associate at consulting agency Mercer.
And it’s getting to some extent the place employers might have to begin shifting prices to workers, she added.
“In accordance with our survey knowledge, for the previous a number of years, [employers have] actually tried to carry off on shifting prices to workers, as a result of I believe all people’s tremendous delicate to the affordability subject,” she mentioned. “However I believe that’s going to be onerous going into 2026. So the renewals, your preliminary ‘What do you assume your improve goes to be?’ goes to be larger than what employers in all probability have seen. And so getting that all the way down to one thing that’s extra inside their finances vary goes to be fairly onerous.”
Watts made these feedback throughout a Monday interview on the AHIP 2025 convention in Las Vegas.
Mercer beforehand reported that employers have been projecting a 5.8% improve in healthcare prices in 2025 from the earlier 12 months. Employers gained’t know what the precise improve was till the top of the 12 months, however their projection is often inside a “fraction of a share level,” Watts mentioned. She anticipates the rise to be even higher in 2026.
GLP-1s are a significant component for these price will increase, she added. Final 12 months, many employers added protection for GLP-1s, however she expects some to rethink that call and put in additional stringent standards round GLP-1 protection.
To deal with price will increase, Watts is seeing employers take a number of methods. One is shifting in the direction of excessive efficiency networks, which is a curated community of suppliers who’ve confirmed to supply high quality care.
Variable copay plans are additionally gaining some traction, through which the copayment varies relying on sure elements, resembling the kind of service or supplier community. Watts gave the instance of the corporate Surest, which presents a device the place members can seek for care and see completely different choices for suppliers. Then their copayment relies on the selection they make.
“Our survey knowledge with employees say that 30% are very involved that they’ll’t afford the care that they want,” Watts mentioned. “And so having a device the place you will get entry to care and your alternative determines what your out of pocket goes to be is getting some traction.”
As well as, some employers are implementing Unique Supplier Group (EPO) plans, through which members solely have in-network protection, except for emergencies. This compares to a Most popular Supplier Group (PPO) plan, through which members can get out-of-network protection, however at a better price.
“It’s on a smaller community. You pay much less for the plan and fewer out of pocket if you want care. And even with these incentives, we’ve seen … decrease prices than of their PPO plans,” Watts mentioned.
Photograph: lerbank, Getty Photographs
