Rising Health Insurance Costs Shock Employees
Open enrollment is here again, and it might come with a surprise this year. Employees could see a significant jump—around 6% to 7% more—in their employer-sponsored health insurance premiums for 2026. That’s more than double the current inflation rate, as stated in a recent report from Mercer.
For example, those opting for single coverage through a preferred provider organization (PPO), which is the most common health plan, might end up paying about $2,400 next year. Mercer’s estimates are based on feedback from over 1,700 employers, suggesting that families could face annual deductions of about $8,900 for their insurance.
It’s interesting to note that a large number of working-age Americans—around 164.7 million—get their health coverage through their employers, making it the top source of insurance. About 60% of people fall into this category, according to KFF.
Mercer indicated to CBS News that companies usually covering most of their employees’ health expenses could expect to spend more than $18,000 per employee on insurance in 2026. Typically, employees foot about 16% to 25% of the total cost, depending on whether they have single or family plans, as per KFF.
This information arrives at a time when American households are grappling with rising costs across the board. Inflation is impacting everything from groceries to housing, and the climb in health insurance premiums is attributed to more frequent medical service use and an aging workforce. Interestingly, the use of certain drugs for weight loss is also a factor, according to Mercer’s chief actuary, Sunit Patel.
Beth Amland, who leads Mercer’s health and benefits research, remarked to CBS News that employees are feeling the pinch on multiple fronts—higher cost-sharing and possibly steeper out-of-pocket expenses.
Once open enrollment kicks off, employees will discover their new costs. While this period usually lasts several weeks in the fall, individual companies may have varying timelines.
Patel mentioned that trends suggest health care prices will remain high, largely due to escalating wages for health care providers, rising costs for medical supplies, and a graying workforce. He noted, “Costs are pretty tight right now.”
Financial Strain on Families
The Peter G. Peterson Foundation highlighted a disconcerting fact: despite poorer health outcomes compared to other nations, Americans are shelling out twice as much for health care. There are several factors driving up these costs, including an aging population and the complexities inherent in the U.S. health system. Furthermore, a report from the Government Accountability Office indicated that growing consolidation among health insurance companies is making competition stiffer, which in turn increases costs.
Lindsey Owens, executive director of the Groundwork Collaborative, warned that the rising health care expenses could further strain families who are already facing skyrocketing costs for food, utilities, and housing.
A July poll by KFF revealed that 40% of insured adults under 65 are anxious about affording their health insurance each month. Owens emphasized the need to find alternatives because families are, in essence, trapped: “They can’t live without medical care.” This situation could mean skimping on family outings or cutting back on necessities just to cover premium costs.
As for inflation, the consumer price index seems poised to rise at an annual rate of 3.1% in September, slightly up from 2.9% in August, according to a survey of economists by FactSet. We’ll have to wait for the official September inflation report, due out on October 24th, to see how these trends play out.
