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U.S. employers project a median health care cost increase of 10% for 2026, according to new survey results from the International Foundation of Employee Benefit Plans. A similar Foundation survey conducted in 2024 projected a median cost increase of 8% for 2025.
“The 10% projected increase is attributed to a variety of factors impacting organizations’ medical plan costs, with catastrophic claims and specialty/costly prescription drugs topping the list,” Julie Stich, vice president of content at the Foundation, said in a statement. “Employers have indicated that cost-sharing, plan design, and purchasing/provider initiatives will be the most impactful techniques to manage costs.”
Data was collected from corporate and single employers between July 30 and Aug. 7, and the report is designed to help U.S. plan sponsors “navigate the changing landscape and learn about health care costs for the coming year,” according to the Foundation’s “Pulse Survey: 2026 Cost Trend” report.
Causes of cost increases
Employers shared their thoughts on the primary factors contributing to a rise in medical plan costs for 2026. These are the top four factors, listed by the percent of respondents who identified them as primary causes:
- 31% cited catastrophic claims (up from 20% last year)
- 23% cited specialty/costly prescription drugs (up from 20% last year)
- 15% cited utilization due to chronic health conditions (down from 16% last year)
- 11% cited medical provider costs (down from 18% last year).
Respondents who selected specialty/costly prescription drugs as a primary reason for the cost increase indicated that GLP-1 drugs, cancer drugs, and cell and gene therapy were predominantly responsible for the increase.
Related: Employers brace for a 9% jump in health care costs, largest in over a decade
Managing costs
When asked what types of initiatives would be the most effective in managing costs for 2026, respondents indicated the following strategies for the upcoming plan year:
- 27% cited cost-sharing initiatives such as deductibles, coinsurance, copays, and premium contributions (up from 21% last year)
- 17% cited plan design initiatives such as dependent eligibility audits, high-deductible health plans, spousal surcharges/carve-outs, and formulary changes (up from 15% last year)
- 17% cited purchasing/provider initiatives such telemedicine, price transparency tools, centers of excellence, health care navigators/advocates, coalitions, and quality initiatives (up from 9% last year)
- 12% cited utilization control initiatives such as prior authorization, case management, disease management, and nurse advice lines (down from 27% last year).
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