US employer healthcare costs projected to rise 6.7% in 2026

American employers face a significant rise in healthcare expenditures, with Mercer projecting a 6.7% increase in employer health-benefit costs for 2026. This represents the steepest rise in 15 years, potentially pushing average costs above $18,500 per employee. Consequently, nearly half of large employers anticipate medical plan changes in 2027 that will increase out-of-pocket costs for workers.

Rather than immediately passing costs to employees, there is a call for employers to demand greater operational efficiency from healthcare providers. Issues such as artificial peaks in hospital demand—caused by the concentration of elective procedures on specific weekdays—can create perceived shortages in beds and staff.

Improving patient flow management can yield substantial savings. For example, Cincinnati Children’s Hospital Medical Center implemented changes that improved critical care access and surgical activity, resulting in an annual financial benefit of $137 million and allowing the facility to avoid a planned expansion costing over $100 million.