Employers
are
already
struggling
with
rising
healthcare
costs
in
2025,
and
early
signs
suggest
these
challenges
will
persist
—
potentially
worsening
in
2026,
according
to
Tracy
Watts,
senior
partner
at
consulting
firm
Mercer.
And
it’s
getting
to
a
point
where
employers
may
have
to
start
shifting
costs
to
employees,
she
added.
“According
to
our
survey
data,
for
the
past
several
years,
[employers
have]
really
tried
to
hold
off
on
shifting
costs
to
employees,
because
I
think
everybody’s
super
sensitive
to
the
affordability
issue,”
she
said.
“But
I
think
that’s
going
to
be
hard
going
into
2026.
So
the
renewals,
your
initial
‘What
do
you
think
your
increase
is
going
to
be?’
is
going
to
be
higher
than
what
employers
probably
have
seen.
And
so
getting
that
down
to
something
that’s
more
within
their
budget
range
is
going
to
be
pretty
hard.”
Watts
made
these
comments
during
a
Monday
interview
at
the
AHIP
2025
conference
in
Las
Vegas.
Mercer
previously
reported
that
employers
were
projecting
a
5.8%
increase
in
healthcare
costs
in
2025
from
the
previous
year.
Employers
won’t
know
what
the
actual
increase
was
until
the
end
of
the
year,
but
their
projection
is
usually
within
a
“fraction
of
a
percentage
point,”
Watts
said.
She
anticipates
the
increase
to
be
even
greater
in
2026.
GLP-1s
are
a
major
factor
for
these
cost
increases,
she
added.
Last
year,
many
employers
added
coverage
for
GLP-1s,
but
she
expects
some
to
reconsider
that
decision
and
put
in
more
stringent
criteria
around
GLP-1
coverage.
To
address
cost
increases,
Watts
is
seeing
employers
take
several
strategies.
One
is
moving
towards
high
performance
networks,
which
is
a
curated
network
of
providers
who
have
proven
to
provide
quality
care.
Variable
copay
plans
are
also
gaining
some
traction,
in
which
the
copayment
varies
depending
on
certain
factors,
such
as
the
type
of
service
or
provider
network.
Watts
gave
the
example
of
the
company
Surest,
which
offers
a
tool
where
members
can
search
for
care
and
see
different
options
for
providers.
Then
their
copayment
is
based
on
the
choice
they
make.
“Our
survey
data
with
workers
say
that
30%
are
very
concerned
that
they
can’t
afford
the
care
that
they
need,”
Watts
said.
“And
so
having
a
tool
where
you
can
get
access
to
care
and
your
choice
determines
what
your
out
of
pocket
is
going
to
be
is
getting
some
traction.”
In
addition,
some
employers
are
implementing
Exclusive
Provider
Organization
(EPO)
plans,
in
which
members
only
have
in-network
coverage,
unless
for
emergencies.
This
compares
to
a
Preferred
Provider
Organization
(PPO)
plan,
in
which
members
can
get
out-of-network
coverage,
but
at
a
higher
cost.
“It’s
on
a
smaller
network.
You
pay
less
for
the
plan
and
less
out
of
pocket
when
you
need
care.
And
even
with
those
incentives,
we’ve
seen
…
lower
costs
than
in
their
PPO
plans,”
Watts
said.
Photo:
lerbank,
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