Healthcare costs are surging yet again in 2026, and this year’s increases are poised to be some of the steepest employers have seen in more than a decade. National forecasts show health benefit costs climbing 10% per employee, driven largely by high-cost medications, rising rates of chronic conditions, and growing demand for specialty care.
For organizations already navigating tight budgets, these increases can feel overwhelming. But with the right strategies, it’s possible to protect plan quality and keep spending under control.
What’s Fueling the Healthcare Cost Surge?
Today’s cost pressures are being amplified by several powerful trends reshaping employer-sponsored healthcare, including GLP-1 medications, high-cost claimants, the increasing prevalence of cancer, and the growing demand for mental health services.
GLP-1 Medications
The explosion in GLP-1 drug utilization, including weight-loss and diabetes medications, is one of the biggest disruptors in employers’ pharmacy spend.
- Total GLP-1 costs have jumped 81% since 2023, including a 58% spike in 2024.
- GLP-1 medications now account for 18% of total pharmacy spend.
- Utilization of GLP-1 medications has surged 113% in just two years.
High-Cost Claimants
Year after year, a small portion of plan members drives the majority of costs. Claims analytics reveal that roughly 5% of the population accounts for 65 to 80% of total healthcare spend — a pattern that continues to intensify as complex conditions become more prevalent.
Cancer Care
Cancer continues to be the top cost driver for employers, with diagnoses on the rise and advanced therapies commanding higher price tags than ever, according to the Business Group on Health.
Mental Health Services
Demand for mental health and substance use disorder care remains high, contributing to increased utilization across all care settings.
These dynamics are forcing employers to reimagine cost stewardship amid a rapidly evolving health landscape.
How Employers Can Take Control of Health Plan Costs
While rising costs may be unavoidable, overspending isn’t. Employers have powerful levers they can pull now to stay within budget while maintaining their employees’ experience.
Pursue Innovative Cost-Containment Solutions
Strategies such as reference-based pricing, alternative funding arrangements, and group captives can give employers more control and reduce volatility. Creative plan designs and vendor partnerships can also help lower spend without reducing coverage quality.
Double Down on Preventive Care
Preventive care is one of the most effective long-term cost mitigators, but only if employees can access and understand it. Invest in:
- Primary care access models
- Virtual and hybrid care platforms
- Wellness and condition-management programs
Ensure that each program is tied to measurable health outcomes, not just activity metrics.
Strengthen Pharmacy Benefit Strategy
Prescription drug costs – especially specialty drugs – will remain a major budget pressure. Employers can regain control by:
- Using targeted prior authorization
- Deploying formulary management approaches
- Considering specialty drug carve-outs or alternative sourcing channels
A sharper PBM strategy is often the difference between escalating pharmacy spend and sustainable long-term savings.
Elevate Employee Education
Even the strongest benefits strategy can’t succeed without employee engagement. Clear communication about cost-effective care options, preventive services, and available programs helps employees make better decisions, improving both outcomes and cost efficiency.
Consider Strategic Point Solutions
One increasingly popular way to manage rising costs is through targeted point solutions. These programs allow employers to address specific cost drivers, such as metabolic health, cancer care navigation, mental health, musculoskeletal care, or financial wellbeing, without committing to a full overhaul of their benefits ecosystem.
Explore Creative Tactics to Reduce Costs With CBIZ
Healthcare costs aren’t going down anytime soon, but employers who act now can stay ahead of the curve. A more intentional, data-driven approach to employee benefits can help organizations protect both their bottom line and their workforce.
Explore the CBIZ Market Outlook Resource Center to discover deeper insights, trend analyses, and actionable strategies to navigate the year ahead.
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