Employers are already scuffling with rising healthcare prices in 2025, and early indicators recommend these challenges will persist — doubtlessly worsening in 2026, in keeping with 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 staff, she added.
“Based on our survey knowledge, for the previous a number of years, [employers have] actually tried to carry off on shifting prices to staff, as a result of I believe all people’s tremendous delicate to the affordability problem,” she stated. “However I believe that’s going to be laborious going into 2026. So the renewals, your preliminary ‘What do you assume your improve goes to be?’ goes to be increased than what employers most likely have seen. And so getting that right down to one thing that’s extra inside their price range vary goes to be fairly laborious.”
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% improve in healthcare prices in 2025 from the earlier yr. Employers gained’t know what the precise improve was till the top of the yr, however their projection is often inside a “fraction of a proportion level,” Watts stated. She anticipates the rise to be even larger in 2026.
GLP-1s are a significant component for these price 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 price will increase, Watts is seeing employers take a number of methods. One is shifting in 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 components, corresponding to the kind of service or supplier community. Watts gave the instance of the corporate Surest, which affords a device 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 knowledge with staff say that 30% are very involved that they’ll’t afford the care that they want,” Watts stated. “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, until for emergencies. This compares to a Most well-liked 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 while you want care. And even with these incentives, we’ve seen … decrease prices than of their PPO plans,” Watts stated.
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