Press Releases

Cost-sharing and purchasing/provider initiatives are most impactful methods for managing costs

August 14, 2025 | Brookfield, Wisconsin—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.

Causes of Cost Increases 

Employers shared their thoughts on the primary factors contributing to a rise in medical plan costs for 2026. The top four factors (listed by the percent of respondents who identified them as primary causes) include the following: 

• 31%—Catastrophic claims (up from 20% last year)
• 23%—Specialty/costly prescription drugs (up from 20% last year) 
• 15%—Utilization due to chronic health conditions (down from 16% last year)
• 11%—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 the following types of drugs were predominantly responsible for the increase:  

• 59%—GLP-1 drugs (down from 75% last year)
• 50%—Cancer drugs (first year this answer option was included)
• 21%—Cell and gene therapy (up from 19% last year)
• 26%—Other drugs.

“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,” said Julie Stich, CEBS, Vice President of Content at the International Foundation. “Employers have indicated that cost-sharing, plan design and purchasing/provider initiatives will be the most impactful techniques to manage costs.”

 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%—Cost-sharing initiatives: e.g., deductibles, coinsurance, copays, premium contributions (up from 21% last year) 
• 17%—Plan design initiatives: e.g., dependent eligibility audits, high-deductible health plans, spousal surcharges/carve-outs, formulary changes (up from 15% last year)  
• 17%—Purchasing/provider initiatives: e.g., telemedicine, price transparency tools, centers of excellence, health care navigators/advocates, coalitions, quality initiatives (up from 9% last year)
• 12%—Utilization control initiatives: e.g., prior authorization, case management, disease management, nurse advice lines (down from 27% last year).

Survey responses reflected in this report are from corporate employers and do not include public plans or collectively bargained plans. Visit www.ifebp.org/healthcarecosts2026 for more information.  Members of the media can obtain a complimentary copy of the report by contacting  [email protected].

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The International Foundation of Employee Benefit Plans is the premier educational organization dedicated to providing the diverse employee benefits community with objective, solution-oriented education, research and information to ensure the health and financial security of plan beneficiaries worldwide. The International Foundation has more than 31,000 multiemployer, corporate and public sector members representing over 25 million lives. For additional information, visit www.ifebp.org.