Persistent pressures demand a closer look
Q3 2026 snapshot
Employers are managing several consecutive years of elevated healthcare cost increases while continuing to invest in their people, remain competitive, and maintain affordable benefits.
At the same time, the programs supporting employees are becoming more demanding to manage as organizations navigate evolving workforce needs, administrative requirements, technology, and a growing number of solutions.
COSTS ARE STABLE, BUT HIGH
Source: 2026 Lockton Trend Study
Many of these pressures are not new. What matters now is understanding what is driving them and where employers have an opportunity to act. That means looking more closely at the factors behind rising costs, how programs are operating, and where resources and investments can have the greatest impact.
What matters now is understanding what is driving them and where employers have an opportunity to act.
Why are health plan costs still so high?
MARKET PRESSURES
7.5%
hospital expense growth
Labor and supply costs, inflation, reimbursement shortfalls, and regulatory changes continue to put financial pressure on the healthcare system and affect the cost of care delivery. Total hospital expenses grew at twice the rate of hospital prices in 2025.
Source: American Hospital Association (AHA) Cost of Caring Report
LARGE CLAIMS & RATE INCREASES
30%
potential increase in renewal rates
Stop loss carriers are targeting rate increases up to 30% as million-dollar claims become more frequent and severe, driven by specialty medicine, oncology, neonatal care, and complex conditions.
BRAND MEDICATIONS
16.2%
increase in brand-name medication prices
Brand-name medication prices increased by 16.2%, marking the third year of double-digit price increases.
MUSCULOSKELETAL CARE
57%
of costs are driven by members with MSK conditions
Members with one or more musculoskeletal conditions represent just 35% of the population but drive 57% of overall total plan costs. Costs rise significantly when these members are managing multiple chronic conditions.
Source: Lockton Infolock®, Incurred June 2025
GLP-1s
1,100%
increase in GLP-1 costs in 4 years
Employers that cover GLP-1s for weight management have seen a 1,100% increase in the per-member-per-month (PMPM) costs of these medications since they became prevalent in 2022.
