I have been warning that consumers are about to get socked with very large health insurance premium rises next year. Every survey suggests this, but more importantly, the evidence comes from continued price increases by providers, which is by far the primary driver of insurance premiums. Utilization changes are typically minimal. America’s largest companies are also its biggest employers; many of the participate in the Business Group on Health. These companies tend to be innovators in health benefits and they have the greatest ability to affect cost and how care is delivered and managed. The Business Group just released its survey of members on their expectations for 2026.
We see from the results that these employers also expect a very large rise in health benefit costs, around 9%. And costs in the last couple of years have been higher than originally projected. The companies hope to offset this somewhat by benefit design changes, meaning employees will have lower benefits. As they do every year, these large employers claim they will vigorously examine health benefit vendor performance and address appropriateness and management in areas such as weight loss drugs and mental health. Pharmacy benefit managers are getting an especially close look, as many of the cost drivers are related to specialty drugs. One fourth of all spending is on drugs, and the increase in spending on medications is higher than the overall trend.
Other tactics mentioned by respondents were narrowing their provider networks to a few high-quality centers, especially for high-cost services; having greater price and other data transparency and sharing with employees and better coordination of care. Cancer was singled out as a specific disease category with high and growing costs and room for better management. As other surveys have suggested, mental health also is getting increased attention. (BGH Survey)
The cynic in me will say that this survey sounds a lot like the ones for the past several years, decades really, and the solutions all sound the same and they don’t seem to be making a bit of difference. If we want lower prices and lower spending, we have to address provider compensation and management.
Until we get to a system where “health insurance” is actually that (similar to car insurance with end-customers paying the tab…lots of competition among carriers and shopping around to find the best deal on medical care) rather than prepaid healthcare by third parties, we’re not going to see any meaningful decrease in costs. Between myself and my employer, we pay over $2,000 per month in premiums and have a $12,000 annual deductible. So it costs $37,000 annually before the insurance company pays anything (other than for routine annual appointments). That’s simply not a sustainable program for the majority of people or companies.
While it’s still frowned upon in many circles, the best way forward is what Samaritan Ministries Health Sharing program provides. It costs roughly $550 per month (for family coverage…less for single) and covers any non-routine medical care over $400. If I didn’t have an employer who provides insurance as good as I have, I’d totally go back to this. One has to be disciplined enough to set aside enough cash (~$2k) for annual appointments, but the care is the same and costs significantly less. The one drawback is it does not cover pre-existing conditions that existed within 18 months of starting with the plan. One also can’t invest in an HSA with this plan, which I find ridiculous and should be changed immediately.
Insurance companies like UnitedHealthGroup and BlueCross (even though they’re considered a non-profit…which is so sad it’s hilarious) and health systems like Fairview, Essentia, and Mayo (which are also considered non-profits) have zero incentives to change things. They are making ridiculous amounts of month and like it the way things are currently.