Your Health Plan Is About to Get Pricier — and It’s Not Just Insurers to Blame

If you get insurance through work, brace yourself: benefit costs are jumping in 2026, and a lot of that bill is headed your way.

Roughly 154 million Americans are covered on the job. Employers say their cost to provide the same coverage will rise about 9% per employee—the biggest spike in 15 years—and most plan to pass some of it to workers through higher premiums, deductibles, copays, or drug costs. Many employees will see paycheck deductions climb 6%–7% on average, with plan designs getting stingier to boot, according to Mercer and other industry surveys.

“It’s almost a perfect storm,” says Larry Levitt of KFF.

Health prices “are going up faster than they have in a long time,” and when insurers hike the bill, employers “turn around and pass on some or all of that to workers.”

Prices are rising faster in health care than the rest of the economy. Medical care costs rose 4.2% year over year in August—doctors’ visits up 3.5%, hospital and outpatient services up 5.3%—versus 2.9% overall inflation (BLS data). That’s the steepest medical reading in three years.

More people are using care again. After pandemic-era deferrals, patients are catching up on surgeries, screenings, mental health, and specialty visits. More use = bigger bills.

Blockbuster drugs are popular—and pricey. Cancer therapies and GLP-1 weight-loss/diabetes drugs (think Wegovy, Zepbound) are exploding in use and can run $800+ per month. Employers in Aon/Business Group on Health surveys expect drug spending up 12% next year (on top of +11% this year).

“Cancers are the top cost driver … with weight-loss drugs a close second,” says Ellen Kelsay, CEO of the Business Group on Health.

Consolidation adds pricing power. Fewer competing hospitals, physician groups, and insurers often means higher negotiated rates. As Mercer’s chief actuary Sunit Patel puts it: health care isn’t a “traditional free market,” so competitive pressure is weak.

Tariffs and the policy overhang. President Trump’s tariffs on imported goods are filtering through to goods and logistics, with economists warning of knock-on effects for medical devices and supplies. Drug imports are currently exempt, but an ongoing federal review—and talk of steep levies—has insurers baking in tariff risk. One UnitedHealthcare filing explicitly added 3.6% for tariff/onshoring uncertainty.

59% of employers tell Mercer they’ll make “cost-cutting changes” to benefits—raising deductibles, copays, coinsurance, or specialty drug tiers. Because benefits are part of total comp, rising health spend can also crowd out raises.

To rein in pharmacy budgets, many plans require prior authorization or BMI thresholds; large employers are exploring cash-pay channels and PBM alternatives to get lower prices.

“This is a stress test for employers and PBMs,” says Brian Whorley of Paytient.

Expect more narrow networks, virtual primary care, steerage to Centers of Excellence for cancer and musculoskeletal care, and care navigation tools—changes pitched as quality improvements that also lower unit costs.

Insurers are requesting a median 18% hike for 2026 exchange plans, citing drug costs, labor, and general inflation. The bigger bomb: the enhanced ACA subsidies are set to expire, which KFF says could raise out-of-pocket premiums 75% on average for more than 20 million enrollees if Congress doesn’t extend them. KFF’s Cynthia Cox warns there won’t be a “death spiral” if the original subsidies remain—but millions could face hardship and some may drop coverage.

Even after two years of cooling headline inflation, prices are still higher than pre-pandemic, and August showed fresh upticks in groceries (+0.6%) and gas (+1.9%)—just as medical prices accelerate. Meanwhile, real wage gains have been modest and the job market is softening, so a fatter health deduction hits take-home pay at the worst time. As Levitt notes, it’s “hidden in plain sight” because the bite happens in your paycheck.

What to watch next

• 2026 employer renewals: Aon pegs per-employee spend at $17,000+, up ~9.5%.
• Plan design changes: More coinsurance on specialty drugs, new utilization management rules.
• Tariff policy: Any move to levy drugs or inputs could push prices higher.
• ACA subsidies: If Congress lets the boosts lapse, millions face big sticker shock during open enrollment.
• PBM shake-ups: Employers are pressing PBMs or testing new benefit models that negotiate direct cash-market prices for high-cost therapies.

What you can do at open enrollment

• Price the whole year, not just the premium. A lower monthly premium can mask a higher deductible/coinsurance.
• Examine drug coverage. Check prior auth, step therapy, and specialty tiers—especially if you use brand or GLP-1 meds.
• Use HSAs/FSAs strategically. Pre-tax dollars can blunt higher out-of-pocket costs (and, in some cases, cash-pay pharmacy channels).
• Lean on navigation. Second opinions, COEs, and virtual options can cut costs and improve outcomes.

Yes, insurers are hiking premiums. But **drugmakers, hospitals, PBMs—and your employer’s purchasing choices—**are all part of the price you pay. With medical inflation outrunning headline inflation and employers absorbing less, 2026 is shaping up to be a bruiser for household budgets. Keep your eye on tariff policy and ACA subsidies—both could determine just how painful the year ahead becomes.

With input from NPR, the Washington Post, CNBC, and Axios.