Healthcare cost hikes in 2026 may be only slightly lower than 2025, WTW says
Summary
WTW’s 2026 Global Medical Trends report forecasts U.S. healthcare benefit costs will rise about 9.6% in 2026 — a touch below 2025’s 9.7% but still well above 2024’s 7.6%. Globally, average health benefit costs are expected to increase 10.3% (up from 10% in 2025). Insurers surveyed expect elevated costs to persist for multiple years, driven by new medical technologies, pressure on pharmacy and outpatient services, and wider structural factors.
Key cost drivers identified include investment in new medical technologies (named by the most insurers), public health system deterioration, and pharmaceutical advances. Cancer is the top costly diagnosis worldwide, and insurers report rising cancer cases among those under 40. WTW and other industry reports note employers face hard choices: adjust plan design, shift costs to employees, or invest in prevention, benefits education and mental-health optimisation to manage inflation.
Key Points
- WTW projects a 9.6% rise in U.S. healthcare benefit costs for 2026, nearly unchanged from 2025’s 9.7%.
- Global average health benefit cost increases are forecast at 10.3% for 2026 (up from 10% in 2025).
- Insurers expect elevated medical cost trends to continue for more than three years, citing technology, pharmaceuticals and strained public health systems.
- New medical technologies are seen as the primary driver of medical inflation today, even though some technologies may reduce long-term costs.
- Cancer is the top cost driver globally; insurers report more cases in under-40s, increasing long-term risk and spend.
- Average U.S. family premiums reached $26,993 in 2025; employees typically shoulder part of that (about $6,850), and employers may shift more costs to staff via plan design changes.
- WTW recommends strategic employer responses: employee education, prevention programmes, optimised mental-health coverage and flexible benefits.
Context and relevance
Rising healthcare costs directly affect HR, compensation and benefits planning, budgeting and workforce policy. For employers managing group schemes, persistent double-digit inflation means tougher renewals, potential changes to contributions or benefits, and a pressing need to balance cost-containment with access to care. The role of new medical technologies — currently a cost driver but potentially a future cost reducer — is a crucial trend to watch for long-term strategy.
Why should I read this?
Heads up HR teams and benefits managers — this isn’t a tiny dip you can ignore. If you’re planning 2026 budgets or thinking about benefit design, this report tells you what to expect: near‑double‑digit trend rates, tech and cancer costs up front, and pressure to rethink employee contributions and prevention programmes. We’ve skimmed the numbers so you can act faster.
Author style
Punchy: this is essential reading for anyone who touches benefits, payroll or budgeting. The numbers are high and persistent — ignore them at your peril.
Source
Source: https://www.hrdive.com/news/us-healthcare-cost-increases-expected-to-fall-in-2026/805284/
