Employers are already scuffling with rising healthcare prices in 2025, and early indicators counsel these challenges will persist — probably worsening in 2026, in response to Tracy Watts, senior accomplice at consulting agency Mercer.
And it’s getting to a degree the place employers could have to start out shifting prices to workers, 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 workers, as a result of I believe everyone’s tremendous delicate to the affordability problem,” she mentioned. “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 share level,” Watts mentioned. She anticipates the rise to be even larger in 2026.
GLP-1s are a significant component 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 transferring 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, wherein the copayment varies relying on sure components, similar to the kind of service or supplier community. Watts gave the instance of the corporate Surest, which affords a instrument 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 staff say that 30% are very involved that they’ll’t afford the care that they want,” Watts mentioned. “And so having a instrument the place you may 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, wherein members solely have in-network protection, except for emergencies. This compares to a Most popular Supplier Group (PPO) plan, wherein 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 once you want care. And even with these incentives, we’ve seen … decrease prices than of their PPO plans,” Watts mentioned.
Photograph: lerbank, Getty Photos
