11% increases coming for 2026 Medical premiums

Unlike the pandemic years, premiums are accelerating again. Double-digit increases are the norm for 2026. A recent KFF study reveals an average increase of 11% for 2026. That’s significantly more than inflation, and much higher than the average employer’s rate of growth. We’ve seen a few single-digit increases here - those employers are sadly called the lucky ones. On the other end of the spectrum, we’ve also seen increases over 95%. The chart below gives you an idea of the landscape.

So what’s driving this? Better yet, what’s to be done?

1. Healthcare Costs - Providers are charging more. Doctors, hospitals, and treatments are getting more expensive. Since claims are usually 90% of your premium, it’s the main driver.

2. Inflation & Labor - inflation is up, and hospitals and clinics are paying more (in salary) to their staff.

3. Payor Consolidation - insurers are merging, which slims competition. Less competition can cause higher prices, and payors are passing those costs on to employers.

4. Tariffs - upping the cost of medications and medical equipment adds costs to premiums.

5. Rx - Injectable Rx, especially GLP-1’s medications are pricy and exploding in use.

6. Participation - employers who charge employees more for premiums are seeing more healthy employees waive coverage. These employees subsidize a lot of premium & bear little pressure on claims. So the insurers raise the unit rates exponentially.

What to do?

A. Shop around.

B. Look at smaller networks.

C. Avoid cash to waive.

D. Maximize participation (above 80% at least).

E. Keep premiums low, even if it means higher deductibles or MOOPs.

F. Consider HRAs, PEO, Level Funding, AHPs, ICHRA, Reference based pricing, etc.

G. Establish free base plans, with buy-up options for those who want to pay more for better coverage.

H. Survey your employees.

I. Tell employees early & often what things cost; consider explaining how premium subsidies counter pay raises.

J. Consider wellness, smoking, and working-spouse surcharges.

K. Get your renewal early. Time solves a lot of problems.

Any good broker will be all over all this for you, early & often. If they’re not, find another broker. Don’t settle. It’s too expensive to ignore.