As the cost of health care in the United States rises to the highest point in more than two decades, companies are preparing for disruptive changes to their health care plans, according to a new survey by global advisory, broking, and solutions company WTW.
WTW’s “2025 Best Practices in Healthcare Survey” finds that U.S. employers project their health care costs, before plan changes, will increase by 9.1% in 2026, compared with 8.1% in 2025 and 7.0% in 2024. According to the survey, employers identified their top drivers of health care costs as pharmacy costs (primarily specialty pharmaceuticals and GLP-1 medications), high-cost claimants and chronic conditions (especially musculoskeletal and cancers).
To tackle these financial challenges, employers’ top priorities over the next three years are company medical costs, company pharmacy costs, and affordability for employees. Following these primary concerns, they are prioritizing employee wellbeing, employee experience, and health care delivery to round out their health-focused strategies for 2026.
While cost-shifting strategies continue to assist in controlling employer health plan costs, companies are managing their program costs by other means, too. Nearly three-fifths (59%) of employers intend to implement broader cost-savings actions in the next three years versus 46% in the past three years. Employers also are prioritizing changes to program subsidies, adoption of alternative plan designs, improving vendor or operational efficiency, and utilization of more effective steerage or behavioral requirements. To address the rising impact of chronic conditions, employers cite the need to expand clinical programs, especially in areas such as cardiovascular health, musculoskeletal health, digestive health, obesity, and oncology.
“Fewer employers are absorbing rising costs because it’s becoming too expensive. They’re also avoiding aggressive cost-shifting because it can affect employee health, satisfaction, and retention,” Tim Stawicki, chief actuary for Health & Benefits at WTW, said in a statement. “Instead, employers are looking to bold disruptive changes that control costs and improve health to create a more sustainable path forward.”
Those changes include managing vendor contracts, conducting audits, and preventing overutilization and abuse of services. Almost half of companies surveyed (46%) are evaluating vendor performance, and more than one-third (36%) have taken medical plans out to bid, with another 50% planning to do so. In addition to these initiatives, 33% of companies have conducted medical claims audits to increase efficiency, with another 44% planning to do so. Additionally, 22% have conducted reviews of prior authorizations or evaluated qualifying payments for out-of-network, with another 34% planning to do so.
Alternative plan designs, currently used by 41% of companies, are becoming a popular, proactive way to address health and rising costs, according to WTW officials. These plans focus on attributes such as alternative or select providers, price or cost transparency, enhanced navigation, expanded use of member-facing technology, and advanced or high-performance primary care.
Greater use of GLP-1 medications for obesity is being assessed, as well, with 15% of employers either considering removing coverage or having already done so in the past year. And artificial intelligence is beginning to take hold with health care benefits, too. While 21% of employers use AI moderately or extensively in their health care programs today, 80% believe it will fundamentally change the way benefits are managed, communicated, and delivered in the next three years.