Healthcare Costs Have Never Been Higher

U.S. health benefit costs per employee are projected to rise 6.7% in 2026 to at least $18,500, according to a Mercer report. This represents the largest annual increase in 15 years, driven by rising prescription drug costs and specialty treatments, which increases financial pressure on both employers and workers.

Why are health insurance costs rising so quickly?

Prescription drug benefit costs are expected to climb around 9% in 2026, according to Mercer. The report identifies specialty medications, gene therapies, and GLP-1 treatments like Wegovy and Ozempic as primary drivers of this surge.

The financial impact is significant. The Kobeissi Letter noted that the projected 6.7% increase for 2026 is more than double the growth rates seen in 2019 or 2022.

Employers are already reacting to these costs. Mercer found that 6% of large employers dropped coverage for weight-loss GLP-1 drugs in 2026, while another 27% tightened utilization controls.

How are employers managing these expenses?

Companies are shifting more costs to their staff. The Kobeissi Letter reported that roughly 66% of large U.S. firms may increase monthly employee premium contributions next year.

Nearly half of large U.S. employers expect to raise copays, deductibles, or other out-of-pocket costs for workers in 2027, according to the Mercer report. Workers who frequently fill prescriptions or visit doctors could see their personal healthcare costs rise by as much as 8% year-over-year.

To control spending, about 31% of large employers plan to offer or already provide non-traditional plans by 2027. These include variable copay models and high-performance networks that lower costs when workers use approved providers.

Simon Camaj, Mercer’s U.S. Health Leader, stated that employers are combining these alternative care strategies with traditional cost-sharing to manage growth while trying to limit the impact on staff.

What is the impact on uninsured and underinsured Americans?

The affordability crisis extends to those without employer-sponsored plans. CDC data from 2025 showed the U.S. uninsured rate remained at 8.3%, leaving approximately 28 million Americans without coverage.

Sen. Bernie Sanders (I-Vt.) highlighted the disparity in spending, arguing that tens of millions remain underinsured or uninsured despite the U.S. spending more than $15,000 per person on healthcare.

What happens next for U.S. healthcare costs?

Health insurers are expected to raise the cost of employer group plans by more than 6% for the fourth consecutive year, according to Mercer.

Federal intervention may target drug pricing to offset these trends. White House estimates suggest drug-pricing agreements made by the Trump administration with major pharmaceutical companies could save the U.S. economy $529 billion over the next decade.

Financial pressure is likely to persist through 2027 as employers continue to redesign plans and adjust premiums to keep pace with the rising cost of specialty care.

Frequently Asked Questions

What is the projected cost of health benefits per employee in 2026?

According to a Mercer report, costs are expected to rise 6.7% year-over-year to at least $18,500.

Which medications are driving the increase in healthcare costs?

Mercer identifies specialty medications, gene therapies, and GLP-1 treatments such as Ozempic and Wegovy as key drivers.

How many Americans remained uninsured in 2025?

Recent CDC data indicates that roughly 28 million Americans, or 8.3% of the population, remained uninsured in 2025.

Do you believe the shift toward non-traditional health plans will effectively lower costs for the average worker?