US employers are bracing for the steepest jump in health insurance costs in at least 15 years, with premiums projected to climb nearly 10% next year — on top of years of already sharp increases.
Benefits consultants Aon and WTW told the Wall Street Journal that employer health-coverage costs are set to surge about 9.5% and 9.2% in 2026, respectively, the fastest rise since at least 2011.
The average family plan now runs roughly $25,500 annually — equivalent to the price of a small car.
“It’s an unsustainable number for a lot of employers,” said Shawn Gremminger, head of the National Alliance of Healthcare Purchaser Coalitions. He said the reaction from companies “ranges between upset, shocked, freaked out and resigned.”
Insurers say premiums are being driven up by rising hospital bills, wider use of medical services and expensive new drugs — particularly the GLP-1 weight-loss and diabetes treatments like Ozempic, Wegovy and Zepbound.
More cases of cancer and chronic conditions among working-age Americans are also straining coverage.
Some businesses are pushing costs onto employees through higher payroll deductions or bigger deductibles. Others are exploring plan redesigns to limit access to certain hospitals or specialists.
A WTW survey found 60% of large employers plan to consider switching insurers or pharmacy-benefit managers in the next few years.
Troy Morris, CEO of space-services company Kall Morris Inc. in Marquette, Mich., said his firm pays 100% of employee premiums but was hit with a 20% increase for the plan year beginning in August, after a 9% hike in 2024.
Out-of-pocket maximums for families rose to $10,000, from $8,150.
“It’s a hard choice that makes you sick to your stomach,” he said.
Mutual of Omaha, with 6,300 workers, saw double-digit cost growth this year and dropped coverage of GLP-1 drugs for weight loss.
The insurer said its pharmacy-benefit manager warned it would lose lucrative rebates if it tried to create a program to manage patients’ weight-loss maintenance.
“We’re certainly frustrated,” said Steven Schlange, the company’s vice president of human resources.
Pam Kehaly, CEO of Blue Cross Blue Shield of Arizona, called the escalation “the worst I’ve seen.” She said aggressive billing by some providers, sometimes aided by artificial intelligence, is adding to the surge.
Kirk Roy, chief actuary at Blue Cross Blue Shield of Michigan, said conditions once considered illnesses of old age — including atrial fibrillation and joint problems — are increasingly showing up in younger, working-age employees.
“Diseases that we usually thought of as for elderly, we’re seeing more and more,” he said.
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