GLP-1s, cancer care are driving higher employer health care costs in 2026

By Tara Bannow – Employers are about to spend a lot more on health insurance next year as they shoulder higher costs driven by GLP-1 drugs, cancer, and mental health services, a new survey finds. In its annual survey released Tuesday, 121 employers who cover 11.6 million people told the Business Group on Health they expect health care costs to spike by a median of 9% next year, a figure that’s in line with other forecasts for employer-based health insurance. The Business Group on Health is a coalition of over 400 companies trying to lower the amounts they spend on employees’ health care. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Employers Face Sharp Health Cost Increases and Are Intensifying Oversight of Insurers and Vendors: Median employer healthcare costs are projected to increase by 9% in 2025, up from 8% in 2024, 7.5% in 2023, and 6.8% in 2022. A separate estimate from the International Foundation of Employee Benefit Plans pegs the 2025 increase at 10%. To manage these rising expenses, companies are expected to scrutinize insurers and third-party vendors more aggressively—auditing claims, reviewing carrier contracts, and capping out-of-network charges—to ensure cost control and avoid fraud or overpayment.

2. GLP-1 Drugs and Cancer Remain Major Cost Drivers, Prompting Tighter Utilization Controls: Increased use of GLP-1 drugs (e.g., Wegovy, Ozempic, Zepbound, Mounjaro) for obesity and diabetes is a key driver of higher costs. 80% of employers reported a rise in GLP-1 use, and 15% expect future increases. While 99% of surveyed employers cover them for diabetes and 73% for obesity, only 6% have dropped obesity coverage. However, 90% require prior authorization and 54% require participation in weight management programs. Meanwhile, cancer is the top cost-driving condition for the fourth consecutive year, cited by 90% of employers as a top-three expense in 2025, up from 80% in 2024.

3. Companies Continue Expanding Benefits in Women’s and Mental Health, Despite Cost Pressures: Employers are expanding coverage in areas aligned with employee demand. For instance, 58% will expand women’s preventive care in 2025 (up 22 points over two years), and 60% will offer menopause support (up from 28% in 2024). By 2026, 36% plan to cover doula services, 55% will cover postpartum depression treatment, and 43% will support high-risk pregnancies in under-resourced populations. Mental health and substance use treatments are also rising in demand: 75% of employers say workers are using those services more, with another 17% expecting future increases.

OBBBA: Helping employers make sense of what’s next

By Brooke Salazar, JD – The broad implications of the One Big Beautiful Bill Act (OBBBA) have sparked a surge in employer outreach to legal, financial and benefits advisors. Employers are increasingly concerned about a wide array of potential consequences, ranging from increased benefits costs to altered employee experiences. As a result, HR teams are turning to their trusted advisors for guidance on forthcoming compliance obligations and legislative transformations. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Data-Driven Strategy Vital for OBBBA Impact Planning: HR teams and their benefits advisors are being advised to utilize foundational tools like census data and claims histories to gain a clearer picture of how OBBBA might affect their workforce. These insights can help predict potential issues such as rural hospital closures and missed preventive care, while also informing strategies to address risk through targeted benefit enhancements and intelligent planning.

2. Medicaid Eligibility Changes Could Shift Employer Costs: The OBBBA introduces a requirement that “able-bodied” adult Medicaid recipients work or engage with their community for at least 80 hours per month. This shift could lead to more employees enrolling in employer-sponsored health plans or others seeking jobs to fulfill the requirement, potentially increasing both plan participation and costs — especially for employers with large part-time or seasonal workforces.

3. Proactive, Personalized Communication Builds Employee Trust: Benefits advisors are encouraged to help HR leaders craft communication strategies tailored to individual employee circumstances in anticipation of OBBBA’s effects. Personalized outreach — such as sharing nearby health care options amid potential hospital closures — not only reduces confusion but also demonstrates empathy, enhancing employee trust and long-term engagement.

Self-dealing: Illegal in Most Industries, Rampant in Health Insurance

By Rachel Madley, PhD - Self-dealing is illegal in banks, real estate, and investment firms, but in health insurance, it’s not only legal, it’s widespread. Large insurers have spent decades consolidating the U.S. health care system, acquiring medical practices, pharmacies, and pharmacy benefit managers, all while sidestepping rules meant to protect patients and taxpayers. Read Full Article… ^{_{(Subscription required)}}

HVBA Article Summary

1. Vertical Integration Enables Circumvention of Regulations: UnitedHealth Group's extensive vertical integration—owning nearly 2,700 subsidiaries, including hundreds of medical practices, pharmacy benefit managers (PBMs), and pharmacies—allows it to move money within its corporate structure in ways that meet the letter, but arguably not the spirit, of Medical Loss Ratio (MLR) laws. By paying above-market rates to its own entities and classifying those payments as medical costs, the company can retain more revenue internally while still appearing compliant with federal limits on administrative costs and profits.

2. Self-Dealing Allegations Parallel Other Regulated Industries: The relationships and payment flows within UnitedHealth Group bear structural resemblance to self-dealing practices that are explicitly illegal in other sectors like banking, real estate, and financial services. For example, paying inflated prices to owned entities or routing transactions through affiliates without competitive pricing mechanisms would be prohibited elsewhere due to the inherent conflict of interest and potential for abuse of consumer funds. While not explicitly illegal in health insurance, these practices raise concerns about fairness and transparency.

3. Call for Regulatory Oversight in Health Insurance: The article argues that current regulatory frameworks do not adequately address the risks of vertical monopolies and self-dealing in the health insurance industry. Given the insurer’s control over multiple layers of the care delivery and reimbursement process, the piece suggests that stricter oversight—similar to rules in banking or investment advising—may be needed to protect patients and ensure that healthcare costs reflect market-based transactions rather than internal profit-shifting strategies.

Hospitals accuse Kaiser of failing to pay millions in emergency care claims

By Kristen Smithberg – Providence hospitals in California have joined other hospitals across the state in suing Kaiser Foundation Health Plan Inc., saying they are owed millions of dollars for emergency treatment of Kaiser’s members, according to several reports. The hospital group claims Kaiser underpaid or, in some cases, failed to make any payments for out-of-network emergency room visits and the follow-up post-stabilization treatments provided to patients. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Allegations of Underpayment for Emergency and Post-Stabilization Care: Providence hospitals allege that Kaiser has failed to adequately reimburse them for out-of-network emergency treatment and subsequent stabilizing care for thousands of patients. The lawsuit, lodged in Los Angeles County Superior Court, seeks compensatory damages, statutory interest, restitution, and injunctive relief aimed at preventing future underpayments for similar services.

2. Kaiser’s Defense and Longstanding Payment Methodology: In response to the lawsuit, Kaiser argues that Providence is demanding higher-than-reasonable payments and defends its use of financial benchmarks drawn from its internal data and prevailing community payment practices. The organization emphasizes that this payment methodology has been in place for over 20 years and aligns with California’s guidelines for calculating reasonable reimbursements.

3. Escalating Legal Dispute and Systemic Scope: The two organizations lack a formal contract to establish discounted service rates, resulting in conflicting views about appropriate reimbursement. Providence’s case involves over 12,000 claims spanning multiple counties, and at least seven other health systems have also brought similar legal actions against Kaiser. Additionally, Kaiser believes the matter should be resolved under the federal arbitration process outlined by the 2021 No Surprises Act rather than through the courts.

Trump revokes Biden executive order on competition impacting healthcare markets

By Noah Tong – President Donald Trump has rescinded an executive order from the Biden administration written to promote competition in markets. Biden’s order explicitly aimed to bolster antitrust enforcement in many industries, including healthcare, and laid out an agenda to accomplish this goal. Read Full Article...

HVBA Article Summary

1. Revocation of Pro-Competition Order Signals Shift Toward Market-Driven Antitrust Philosophy: The Trump administration revoked a Biden-era executive order aimed at promoting competition in sectors like healthcare and tech. Officials from the DOJ and FTC supported the move, arguing that the order encouraged government overreach and prescriptive regulation. The administration framed the revocation as a return to empowering consumers rather than regulators.

2. Controversy Over Impacts on Healthcare Consolidation and Market Oversight: The revoked order had targeted issues such as rural hospital consolidation, monopolistic behavior in health insurance, and restrictive drug patent laws. It had supported actions like enabling Medicare to negotiate drug prices, cracking down on non-compete clauses, and promoting pricing transparency—steps critics say are now being abandoned, raising concerns about unchecked corporate consolidation.

3. Debate Reflects Broader Tensions Between Antitrust Enforcement and Business Interests: While business groups like the U.S. Chamber of Commerce applauded the revocation, seeing it as a pro-market move, critics—including lawmakers and anti-monopoly advocates—warn it caters to large corporate interests. Reports of close ties between Trump allies and lobbying firms with corporate clients have fueled concerns over favoritism and diminished consumer protections.

Health Savings Account Adoption Spans Socioeconomic Spectrum

By Yasin Mohamud - Assets in health savings accounts reached $146.64 billion at the end of 2024, according to the 2024 Devenir & HSA Council Demographic Survey,  an increase of almost 16% from the year-end 2023 total of $123 billion. Data from the Devenir Group, LLC estimates as of December 31, 2024, there were 39.3 million HSAs in the U.S., collectively providing coverage for roughly 59.3 million people. Read Full Article…

HVBA Article Summary

1. Widespread HSA Adoption Across Age Groups: Health Savings Accounts (HSAs) are seeing significant engagement across age demographics. Millennials, particularly those in their 30s, held approximately 30% of all HSAs by the end of 2024, highlighting their growing interest in long-term healthcare savings. At the same time, older adults aged 55 and above not only contributed heavily to their accounts but also amassed over $63 billion in assets—a 21% year-over-year increase. Notably, the highest average account balances were among those aged 65–69 and 70–74.

2. Socioeconomic Diversity in HSA Ownership: HSA usage is not limited to high-income earners; it spans a broad range of income levels. According to the data, 64% of HSA account holders reside in zip codes where the median household income is below $100,000, with nearly one-third in areas under $70,000. This suggests that HSAs are being adopted widely across different economic brackets, making them an accessible savings tool for various communities.

3. Geographic and Population Trends: While the largest number of HSA accounts and covered individuals are found in the three most populous states—Texas, California, and Florida—some smaller states show higher proportional coverage. Colorado, Minnesota, and Arizona lead the nation in terms of the percentage of privately insured residents covered by HSAs, with rates of 62%, 55%, and 51% respectively. This indicates regional differences in HSA penetration beyond sheer population size.