Rising medical and prescription costs are increasing insurer and employer expenses, prompting expectations of higher premiums and narrower coverage in 2026. Utilization is up, including more emergency-room visits and higher mental-health claims, while healthier people are leaving individual markets, concentrating sicker enrollees and raising claims. A fraud crackdown and tighter eligibility verifications reduced enrollment growth seen after the pandemic, making it harder for some to stay covered. Costly diabetes and obesity GLP-1 drugs such as Ozempic, Mounjaro, Wegovy and Zepbound are straining pharmacy budgets. New one-time gene therapies further escalate potential expenditures and fiscal uncertainty.
Pricey prescriptions and nagging medical costs are swamping some insurers and employers now. Patients may start paying for it next year.Health insurance will grow more expensive in many corners of the market in 2026, and coverage may shrink. That could leave patients paying more for doctor visits and dealing with prescription coverage changes.Price increases could be especially stark in individual coverage marketplaces, where insurers also are predicting the federal government will end some support that helps people buy coverage.
In conference calls to discuss recent earnings reports, insurers ticked off a list of rising costs: More people are receiving care. Visits to expensive emergency rooms are rising, as are claims for mental health treatments.Insurers also say more healthy customers are dropping coverage in the individual market. That leaves a higher concentration of sicker patients who generate claims.Enrollment in the Affordable Care Act's insurance marketplaces swelled the past few years. But a crackdown on fraud and a tightening of eligibility verifications that were loosened during the COVID-19 pandemic makes it harder for some to stay covered, Jefferies analyst David Windley noted.People who use little care "are disappearing," he said.
Prescription drugs pose another challenge, especially popular and expensive diabetes and obesity treatments sometimes called GLP-1 drugs. Those include Ozempic, Mounjaro, Wegovy and Zepbound."Pharmacy just gives me a headache, no pun intended," said Vinnie Daboul, Boston-based managing director of the employee benefits consultant RT Consulting.
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