The Hidden Drivers Behind Rising Healthcare Costs

For many employers, healthcare cost increases are expected. Yet one of the biggest misconceptions in employee benefits is that rising healthcare costs are driven solely by employees using more healthcare services.

In reality, many of today's biggest healthcare cost pressures stem from behind-the-scenes changes in billing practices, therapy use, and emerging treatments that are reshaping the economics of care.

As we look ahead, three trends stand out as important drivers of healthcare costs for employers in 2026.

1. Coding and Reimbursement Changes Are Increasing Costs

When healthcare costs rise, it's easy to assume employees are visiting doctors more often or receiving more services. However, reimbursement changes can increase costs even when utilization remains relatively stable.

Over the past several years, providers have adopted updated evaluation and management coding standards that place greater emphasis on total provider time and medical decision-making complexity. These coding changes redefined "time" for billing purposes, allowing physicians to count not only face-to-face patient interactions, but also the time spent on related activities performed on the same day, such as reviewing records, documenting care, and completing administrative tasks. As a result, more office visits and patient encounters may be billed at higher reimbursement levels than in the past.

These changes have expanded beyond traditional office visits and are increasingly influencing reimbursement across all care settings.

For employers, this means healthcare spending can increase even when employee behavior remains unchanged. Understanding the difference between utilization growth and reimbursement inflation is becoming increasingly important when evaluating claims trends and renewal increases.

What employers should watch:

• Rising average cost per visit
• Changes in provider billing patterns
• Cost increases that outpace utilization growth
• Opportunities for claims auditing and payment integrity reviews
  
  

2. The GLP-1 Conversation Is Becoming More Complex

Few topics have generated more discussion in employer-sponsored healthcare than GLP-1 medications.

While initially associated with diabetes management and weight loss, these medications are rapidly expanding into additional treatment areas. New indications and ongoing research are increasing demand and creating new questions for employers around coverage, affordability, and long-term value.

The challenge is that GLP-1 discussions are no longer simply about pharmacy spend. Employers are evaluating broader impacts on medical costs, care utilization, employee demand, and long-term population health outcomes.

At the same time, manufacturers continue to invest heavily in next-generation therapies that may offer greater effectiveness but could also introduce additional cost considerations.

The result is a growing need for employers to develop a thoughtful strategy rather than viewing GLP-1 coverage as a simple "yes" or "no" decision.

What employers should watch:

• Expanding FDA-approved indications
• Long-term adherence and engagement
• Total cost of care implications
• Pharmacy benefit design and utilization management strategies
  
  

3. High-Cost Specialty Care Is Reshaping Employer Risk

Perhaps the most significant long-term trend in healthcare is the continued growth of specialty medications, oncology treatments, and gene therapies.

Cancer treatment continues to evolve rapidly, with new therapies helping patients live longer and receive more personalized care. While these advances are incredibly positive from a clinical perspective, they also contribute to rising healthcare expenditures.

At the same time, gene therapies are introducing a new category of high-cost claims. Some treatments now carry price tags measured in the millions of dollars per patient, creating challenges for employers of all sizes.

These therapies have the potential to dramatically improve or even cure certain conditions, but they also force employers, carriers, and stop-loss providers to rethink traditional approaches to risk management.

For many organizations, specialty care management is quickly becoming one of the most important components of a sustainable benefits strategy.

What employers should watch:

• Specialty pharmacy trends
• Oncology treatment costs
• Gene therapy developments
• Stop-loss strategy and catastrophic claim protection
  
  

Honorable Mention: Maternity Billing Is Becoming More Transparent and More Complex

Another trend employers should keep on their radar is the continued evolution of maternity billing and reimbursement practices.

Historically, many maternity services were billed as a bundled episode of care, making it difficult to understand where costs were being incurred throughout pregnancy, delivery, and postpartum care. Beginning January 1, 2027, maternity care reimbursement is expected to undergo a significant shift as bundled obstetrical billing gives way to unbundled detailed reporting of individual services throughout the pregnancy journey.  

While increased transparency can help employers better understand maternity-related spending, it may also create greater cost variability and administrative complexity. What previously appeared as a single maternity claim may now be represented by multiple claims across different providers and stages of care.

As maternity costs continue to represent a significant portion of healthcare spending for many employers, understanding these billing changes will be increasingly important when evaluating claims data and identifying opportunities for maternal health support programs.

What employers should watch:

• Changes in maternity claims reporting
• Cost variability across providers and facilities
• Opportunities for maternal health navigation programs
• Trends in prenatal and postpartum care utilization
  
  

The Bottom Line

Healthcare costs are no longer driven solely by how often employees seek care. Increasingly, employers are navigating a healthcare landscape shaped by reimbursement changes, breakthrough therapies, specialty medications, evolving treatment models, and greater transparency into how care is billed.

Organizations that focus only on premiums may miss the underlying factors driving cost increases. Those that invest time in understanding these trends will be better positioned to make informed decisions, support employees, and manage healthcare spending more effectively.

Want to understand which of these trends may be affecting your plan? Our team can help analyze your claims data and identify emerging cost drivers before renewal season. 

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