Why your health insurance copays, deductibles and premiums will probably surge next year

By Tami Luhby, CNN

(CNN) — Brace yourselves, workers. Your health insurance at the job could cost you a lot more in 2026.

Although overall inflation is more muted than a few years ago, employers are preparing for the steepest increase in health benefit costs in 15 years, according to Mercer’s National Survey of Employer-Sponsored Health Plans, released Thursday.

That means many employees will have to shell out more for health care from their paychecks and when they go to the doctor – adding to the financial squeeze many consumers are already feeling from stubbornly high consumer prices that could soon jump even more as President Donald Trump’s tariffs kick in.

Workers can expect to shell out an additional 6% to 7% in premiums, on average, according to Mercer. Some companies will try to limit the increase, but they typically do that by hiking deductibles and copays.

“The cost of coverage is going up,” said Beth Umland, director of research for health and benefits at Mercer, an employer benefits consulting firm. “That’s a combination of higher prices for health care services and higher utilization.”

During the pandemic, many companies tried to shield their staffers from higher costs by absorbing rising health care expenses. But fewer are doing so now.

Some 59% of employers intend to make cost-cutting changes to their health insurance plans next year, up from 44% in 2024, Mercer found. These measures generally involve requiring employees to pay more when they seek care through higher deductibles and out-of-pocket costs.

Workers will find out more details about their 2026 health care coverage during open enrollment, which typically happens in the fall.

Many employers are offering more choices of plans, some of which may have lower costs for enrollees, said Sunit Patel, Mercer’s US chief actuary for health and benefits. One popular trend is to provide plans with a broad network of doctors but with differing out-of-pocket charges depending on the practitioner, for instance.

Cost pressures

Mercer’s projection of a 6.5% hike for 2026 is the fourth year in a row of elevated cost growth, following a decade of more moderate annual increases averaging about 3%. The forecast takes into account employer measures aimed at reducing expenses, according to the firm, which surveyed more than 1,700 employers with 50 or more workers.

Other analyses have come to similar conclusions. Companies surveyed by the Business Group on Health are expecting a typical 7.6% increase in costs for 2026, after two years of having actual health care expenses sharply outpace projections.

“The story this year is perhaps more daunting and sobering than it ever has been,” Ellen Kelsay, the industry group’s CEO, told reporters last month.

Meanwhile, health insurers expect medical costs for employers to grow at 8.5% for the third year in a row, according to PwC, a consulting firm, which noted that its 2024 and 2025 trend forecasts were restated higher than previously reported based on insurers’ experiences.

Cancer care has been the top driver of employer cost increases for four years in a row, exacerbated by a growing prevalence of diagnoses and more expensive treatments, according to the Business Group on Health, which surveyed 121 larger companies.

That is leading employers to focus more on cancer prevention and screenings, including expanding coverage of breast cancer screenings and alternatives to colonoscopies.

Also, popular but pricey GLP-1 drugs are contributing to escalating employer costs, the industry group found. Nearly all companies surveyed will cover these medicines for diabetes in 2026, while just under three-quarters will do so for obesity.

Nearly 8 in 10 employers have seen an increase in the use of these drugs, while an additional 15% anticipate seeing an uptick. More companies will try to contain their costs by requiring employees who use these medications for weight loss to get prior approval, participate in weight management programs or meet other requirements.

In an ongoing trend, more workers are using mental health services, which is adding to companies’ expenses, according to the Business Group on Health. Employers have sought to expand access to such care and reduce stigma concerns in recent years.

Looking to the future, companies are watching for tariff-related health care cost spikes, as well as any ramifications from Trump’s domestic policy agenda, known as the “big, beautiful bill,” which is expected to increase the number of uninsured Americans in coming years. However, it is too early to tell because there are still many unknowns, Patel said.

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