2026 Health Care Cost Projections
Finding ways to manage rising health care costs while keeping benefits affordable for employees is critical for employers in 2026; however, it won’t be easy. Health care costs in the United States continue to climb at a staggering pace. A recent Business Group on Health (BGH) survey revealed that U.S. employers predict a 9% increase in health care costs for 2026. This would be the most significant annual increase in health care costs in more than a decade, outpacing recent years where organizations generally predicted 7%-8% growth in costs. The projected 9% increase is before plan design changes and is 7.6% after cost-control measures, such as cost sharing, revisiting benefits offerings and evaluating vendors. Other surveys are also predicting a cost increase between 8.5% and 10% in 2026.
Reasons Why Health Care Costs Are Rising
Communicating With Employees
Transparent and empathetic communication is essential to help employees understand and navigate rising health care costs. Consider the following communication strategies:
Employers should avoid jargon and complexity when sharing open enrollment and general employee benefits information. It’s important to use straightforward language to explain why costs are rising and what steps the organization is taking to manage them. Consider highlighting any positive changes, such as coverage for more specialty drugs or added wellness benefits.
The end goal is to help employees become informed health care consumers so they feel confident in their health care decisions and make informed decisions that can result in lower costs. To do this, employers can share insights on how employees can use their plans effectively, avoid unnecessary costs and understand the value of their benefits. Resources like cost comparison tools and provider directories can be helpful for employees.
It’s best to inform employees about benefit changes before they take effect. Regardless of whether the change is for the better or worse, explain the rationale behind adjustments and how they impact care options. This transparency can help reduce confusion and build trust.
Show employees what you’re doing to manage costs (e.g., negotiating with providers, using reference-based pricing, offering telehealth or investing in wellness programs). This reassures them that you’re actively working to protect their benefits.
When possible, employers can put benefits offerings in context with real-world scenarios. Employees can relate to stories, so find ways to bring the options to life. For example, use relatable scenarios to illustrate how cost drivers affect the organization and employees. For example, explain how a new high-cost medication impacts premiums or why increased mental health utilization is a positive but costly trend.
The main point for employees to understand is that these rising costs aren’t specific to the organization—they are happening everywhere. Employers can share resources that explain why costs are going up (e.g., inflation, labor costs, diagnostics and therapeutics advances and provider consolidation) so that employees understand the bigger picture.
No matter the topic, organizations should tailor communication methods to their workforce. Working arrangements, such as on-site, hybrid and remote, also will play into communication channels. For some employers, it may be best to combine in-person meetings, digital tools (e.g., intranet, chat and email), and printed materials to ensure everyone receives and understands the information.
Conclusion
This article is not intended to be exhaustive nor should any discussion or opinions be construed as professional advice. © 2025 Zywave, Inc. All rights reserved.
