More of your paycheck will likely go toward health insurance premiums next year as employers face the biggest increase in health care costs in 15 years.
Health care costs are projected to rise 6.5% in 2026, compared with wage growth of just 3%, according to new data from Mercer. That means a larger portion of workers’ income will go toward health care expenses.
“About 60% of employers are planning not only to increase payroll contributions, but, as you alluded to, increasing cost sharing at the point of service — so that could be co-pays, deductibles, co-insurance or out-of-pocket maximums,” said Sunit Patel, chief actuary of U.S. Health at Mercer.
Patel said employers made a significant effort during the pandemic to absorb rising costs, but broader economic changes have altered the equation.
“I think the cost pressures are more significant, and even though there is a focus on employee health and well-being, there's certainly just a financial reality,” he said.
Factors driving the increases include inflation, an aging population that uses more health care and newer treatments that come with higher price tags.
Mercer’s projections mark 2026 as the fourth consecutive year of rising health care costs, following a decade of more moderate increases.
The Kaiser Family Foundation’s 2024 annual report found that coverage costs rose about 24% between 2019 and 2024, but wage growth largely kept pace
