Survey: Employers expect health care costs to increase by 9% in 2026, driven by GLP-1 and cancer care
Employers are forecasting a 2026 cost trend to increase by 9% in 2026, 7.6% after they make plan design changes, according to a survey by Employer Health Group, an employer advocacy group.
“This is the highest single-year forecast in more than a decade,” Ellen Kelsay, president and CEO of Health Business Group, said in a press conference. “The increased compound effect of high health care trends means that health care costs by 2026 [are] It is expected to be 62% higher than in 2017. ”
For the second consecutive year, actual health care costs exceeded the employer’s projected costs. In 2024, employers expect health care costs to increase by 7.1%, actually up 7.5%. In 2023, employers expect costs to increase by 6.6%, and an increase of 6.8%. In addition, two-thirds of employers say rising costs are affecting their ability to provide global benefits.
The annual Employer Healthcare Strategy Survey received responses from 121 employers from various industries. These employers collectively cover 11.6 million people worldwide.
Other findings from the investigation include:
1. Prescription drug costs are the main contributor to medical expenses. The median pharmacies accounted for the median overall health care spending in 2024, compared with 21% in 2021. GLP-1 is partly responsible, with 72% of respondents saying they limit their costs to “major” or “major”. Another 61% said the same thing about high-cost therapy.
2. Almost all employers cover diabetes for GLP-1, while 73% cover obesity. About 79% of employers said they are seeing an increase in utilization of obesity treatments. When it comes to obesity GLP-1, the most common utilization management strategy is prior authorization, requiring participation in a weight management program and meeting certain weight index thresholds.
3. When asked what the cost of driving was, 88% said cancer, 71% musculoskeletal conditions and 35% quoted cardiovascular disease. This is the fourth consecutive year, and cancer is the best situation to cause costs. To address cancer costs, many employers are expanding coverage of cancer screening, including colon, breast and skin cancer. About half of respondents also said they will provide opportunities for the Center for Excellence in 2026.
4. To reduce health care costs, employers’ highest strategies include leveraging requests for proposal procedures to get better pricing from existing businesses or new suppliers, eliminating plans for lower utilization, replacing underperforming suppliers, and limiting coverage of GLP-1.
5. About 17% of employers adopted non-traditional or alternative health plans, while 7% added it in 2026, while 36% were considering 2027 or 2028. Additionally, 16% use transparent pharmacy welfare managers, while 11% add a range in 2026, while the new range or 2028 range is not considered in the 2027 or 2027 range. The report said that included “difficulty in calculating the financial impact of the conversion, nor was there a need for member disruptions”.
6. Employers are also concerned about a number of policy initiatives. About 85% of respondents want the government to protect tax treatment for employers’ health coverage, 81% want the government to protect ERISA preemptively, and 62% want the government to address prescription drug pricing. Additionally, 66% of employers said they were concerned or very worried that changes to government plans, such as Medicare and Medicaid, would harm the coverage of employer-sponsored coverage.
This is not surprising because it is linked to “long-standing employer belief that efforts to reduce the costs of programs like Medicare and Medicaid often result in costs shifting into employer-sponsored programs,” Brenna Shebel, vice president of health at the Health Consortium, said in a news release.
Photos: PM image, Getty image
