Employers are already combating rising healthcare prices in 2025, and early indicators counsel these challenges will persist — doubtlessly worsening in 2026, in line with Tracy Watts, senior companion at consulting agency Mercer.
And it’s getting to some extent the place employers might have to start out shifting prices to staff, she added.
“In line with our survey information, for the previous a number of years, [employers have] actually tried to carry off on shifting prices to staff, as a result of I feel everyone’s tremendous delicate to the affordability problem,” she stated. “However I feel that’s going to be arduous going into 2026. So the renewals, your preliminary ‘What do you suppose your enhance goes to be?’ goes to be larger than what employers most likely have seen. And so getting that all the way down to one thing that’s extra inside their price range vary goes to be fairly arduous.”
Watts made these feedback throughout a Monday interview on the AHIP 2025 convention in Las Vegas.
Mercer beforehand reported that employers had been projecting a 5.8% enhance in healthcare prices in 2025 from the earlier yr. Employers gained’t know what the precise enhance was till the tip of the yr, however their projection is normally inside a “fraction of a proportion level,” Watts stated. She anticipates the rise to be even larger in 2026.
GLP-1s are a significant factor for these value will increase, she added. Final yr, 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 value 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, by which the copayment varies relying on sure elements, equivalent to the kind of service or supplier community. Watts gave the instance of the corporate Surest, which provides a software the place members can seek for care and see completely different choices for suppliers. Then their copayment is predicated on the selection they make.
“Our survey information with employees say that 30% are very involved that they will’t afford the care that they want,” Watts stated. “And so having a software the place you will get entry to care and your selection 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, by which members solely have in-network protection, until for emergencies. This compares to a Most well-liked Supplier Group (PPO) plan, by which members can get out-of-network protection, however at the next value.
“It’s on a smaller community. You pay much less for the plan and fewer out of pocket whenever you want care. And even with these incentives, we’ve seen … decrease prices than of their PPO plans,” Watts stated.
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