Report Projects 8.5% Medical Cost Trend For 2026: Insights For Employers
- SiekmannCo
- Oct 16
- 2 min read
PwC's latest Medical Cost Trend report signals continued upward pressure on healthcare expenses, with a projected 8.5% increase for group health plans in 2026, the third consecutive year at this level. This trend echoes rates from 15 years ago, following a brief dip during the COVID-19 recovery in 2022. At The Siekmann Company, we view this as a pivotal moment for employers to refine strategies that safeguard affordability without compromising care. Let's unpack the drivers, offsets, and actionable steps ahead.
Key Drivers Behind The 8.5% Trend
Several entrenched factors are fueling this sustained inflation in medical costs, based on PwC's survey of actuaries from 24 major U.S. health plans covering over 125 million lives.
Primary Inflators
Hospital Costs and Revenue Cycle Pressures: Ongoing inflationary strains in hospital operations, including labor and supply chain issues, continue to elevate service pricing.
Emerging Therapeutics like GLP-1 Agonists: These innovative drugs for weight management and diabetes are expected to contribute 0.5% to 1.0% of the overall trend, with pharmacy costs outpacing medical trends by 2.5 percentage points.
Rising Behavioral Health Demand: One in three actuaries highlighted behavioral health as a top driver, projecting 10%-20% growth due to increased utilization and integration needs.
Policy Influences
Federal shifts under the OBBB Act, including changes to Medicaid eligibility, the potential lapse of ACA subsidies, and proposed pharmaceutical import tariffs, may introduce additional uncertainties and upward pressures on costs.
These elements underscore the need for proactive monitoring, as industry forecasts suggest healthcare inflation persisting into 2026 and beyond.
Counterbalancing Forces: Modest Deflators In Play
While challenges dominate, PwC identifies targeted offsets that could temper the trend slightly:
Biosimilars Adoption: As the leading deflator, these cost-effective alternatives to biologics saw increased uptake in 2024, with more approvals on the horizon to ease specialty drug spending.
Enhanced Care Management: Strategies like utilization reviews, AI-driven analytics, and pharmacy oversight are gaining traction, helping plans control expenses more effectively.
Though modest, these deflators highlight opportunities for employers to partner with innovative vendors and prioritize value-based care.
Strategic Opportunities For Employers In 2026
Rising trends demand a balanced approach: controlling costs while maintaining employee access to quality care.
Employers can turn these insights into advantages by:
Setting clear performance metrics for health plans and vendors, focusing on GLP-1 management, behavioral health integration, and pharmacy controls.
Exploring benefit innovations, such as mental health parity and predictive analytics, to improve outcomes and satisfaction.
Preparing for policy ripple effects through scenario planning and flexible plan designs.
By addressing these priorities, organizations can enhance workforce well-being and financial resilience.
Let's Build Your Resilient Benefits Strategy
The 8.5% medical cost trend for 2026 is a call to action for forward-thinking employers. At The Siekmann Company, our experts are equipped to help you analyze your plan's exposure, implement cost-mitigation tactics, and design sustainable solutions tailored to your needs.
Contact The Siekmann Company today for expert guidance and personalized assistance. Visit our website or call 614-873-5200 to start shaping your financial future with confidence. Our team is here to help you navigate these changes seamlessly.
