Americans face biggest increase in health insurance costs in 15 years

Americans with employer-sponsored health insurance could see premiums climb 6% to 7% in 2026, according to a new report from consulting firm Mercer.

The survey of more than 1,700 U.S. companies projects average employer plan costs to rise 6.5% next year — the sharpest increase since 2010. As overall plan costs rise, workers’ share of the premium is also expected to increase.

If the forecast holds, it would mark the fourth consecutive year of steep premium hikes after a decade of moderate growth averaging around 3% annually. Nearly 60% of employers say they plan to cut costs by raising deductibles and other forms of cost-sharing, which could leave workers with higher out-of-pocket expenses. Employers that don’t make changes are expected to face nearly 9% cost increases.

Two main drivers are pushing costs higher: rising prices for care and greater utilization of services. Wage increases across the health care industry and expensive new drugs — from cancer therapies to weight-loss treatments — are adding to the cost burden, while delayed care from the pandemic and the rise of virtual care have fueled increased demand.

Some insurers have also pointed to President Donald Trump’s tariffs as a factor in raising premiums. Still, employers have absorbed much of the cost in recent years, with workers’ contributions up just 5% since 2019. In 2024, the average annual family premium hit $25,572, with employees paying $6,296 and employers covering $19,276.