Health care costs have been growing at an alarming rate in recent years, and they’re not slowing down. As such, surveys project that health care costs in the United States are likely to increase by 6.5% to, in many cases, as much as over 10% in 2026. Here’s a breakdown of cost predictions:

• Mercer predicts that the total health benefit cost per employee will rise 5% on average in 2026, which is the highest increase since 2010, even after planned cost-reduction measures.
• The Business Group on Health (BGH) expects a 6% increase in health care costs for 2026 when offset with plan design changes.
• PwC expects medical costs to grow at 5% for the third year in a row.
• The International Foundation of Employee Benefit Plans anticipates a 10% increase in health care costs in 2026.
• A KFF analysis revealed the median proposed premium increase among 318 small group insurers is 11% for 2026.

Furthermore, individual Marketplace plans are likely to go up even higher, as much as 15%-20%. Regardless of the exact figure, employers can expect their health care costs to continue to skyrocket throughout 2026. As the next year approaches, many employers remain curious about what is driving these increases. Here are key factors that will impact rising health care costs in 2026.

GLP-1s

Growing demand for glucagon-like peptide-1 (GLP-1) drugs continues to be a top factor in rising health care costs. Although initially approved as Type 2 diabetes treatments, GLP-1 drugs have been found to be effective for weight loss when paired with diet and exercise. These drugs have gained rapid popularity from plan participants eager to lose weight and improve their overall health. Mounjaro (which has the active ingredient tirzepatide), Ozempic and Rybelsus (which both use the active ingredient semaglutide) are approved for treating diabetes but are commonly prescribed off-label for weight loss. Zepbound (tirzepatide) and Wegovy (semaglutide) are drugs that use the same active ingredients but are approved to treat obesity for qualifying patients.

In addition to treating Type 2 diabetes and obesity, the active ingredients in these medications have shown promise for treating other conditions, including Alzheimer’s disease, heart disease and even sleep apnea. While these use cases are still undergoing clinical trials for approval, the potential applications of GLP-1s could lead to these costly drugs being used to treat even more patients.

GLP-1 medications typically cost around $1,000 per month and are intended to be taken in perpetuity to achieve their benefits. This means that GLP-1 users may experience health benefits but will be required to use these high-cost treatments on an ongoing basis. In response to the popularity of GLP-1s, more employers may require employees who use these medications for weight loss to get prior approval, participate in weight management programs or meet other requirements.

This Bulletin is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice. Design ©2025 Zywave, Inc. All rights reserved.