Strategies to overcome a projected 9% increase in expenses
What’s in this blog?
- Breaking Down Rising Healthcare Cost
- How Employee Wellness Programs Help Combat Rising Healthcare Costs
- Cut Healthcare Costs While Maintaining High-Quality Care With Agile Telehealth
Employers are bracing for a 9% increase in healthcare costs in 2026, which comes after two consecutive years where actual costs outpaced projected expenses. The challenge on every organization’s mind? How to contain these costs without taking a bite out of the benefits employees need.
We’ll explore what’s driving the rapid increase in healthcare costs and share strategies forward-thinking employers can use to manage growing expenses in an unprecedented market.
Breaking Down Rising Healthcare Costs
Healthcare costs have been going up for years. The forecasted numbers for 2026 are a sky-high 62% above what they were a decade ago. Yet the noteworthy shift in recent years is the pace of the growth–costs are not only increasing, they’re doing so faster, as well.
A nationwide survey on employer-sponsored healthcare expenditures identified several key drivers of increased costs.
GLP-1 medications
Seventy-nine percent of employers have seen an increase in the use of costly GLP-1 medications, and 15% expect to see an increase in the future. You’ve probably heard about GLP-1’s in relation to weight loss support, but they’re also used to treat conditions tied to blood sugar, like diabetes, which affects an estimated 38 million Americans.
Mental health care
More employers are expanding their mental health coverage, which is a good thing for employees, but it comes with added expenses. Seventy-three percent of employers say costs related to mental health care increased, while 17% expect them to increase in the future.
Pharmaceuticals
The average annual price of specialty prescription drugs has nearly tripled over the last decade. Brand name drugs (think Lipitor or Prilosec) now account for 77% of all prescription drug spending, driving pharmacy costs, health insurance premiums, and deductibles upward.
Chronic diseases
For the fourth year in a row, cancer is the number one condition driving employer healthcare costs. The cause for this is twofold; certain types of cancer have become more prevalent, while better technology means the disease is also being detected earlier and more frequently.
Musculoskeletal conditions, cardiovascular disease, and diabetes were also identified as conditions that contribute heavily to costs.
So, the question persists: what can employers do to navigate the rising expenses?
Employee wellness programs are a promising strategy, helping organizations proactively combat chronic illnesses, shift utilization to lower-cost services, and cut related expenses from absenteeism and lost productivity.
Do employee wellness programs work?
While some of workers’ healthcare needs are outside of an employer’s control, employee wellness programs can make a real impact easing some of the financial pressure. Wellness programs offer tangible benefits in the form of prevention, early detection, increased employee engagement, overall well-being, and more.
How Employee Wellness Programs Help Combat Rising Healthcare Costs
Rising healthcare costs are a formidable challenge, but one that can be addressed with innovation and resourcefulness. A flexible, dynamic employee wellness program can help companies tackle increasing expenses from several angles:
Reducing preventable health conditions
Chronic diseases account for 90% of the nation’s $4.9 trillion annual healthcare expenditures. Many of these conditions, like heart disease and obesity, are heavily influenced by lifestyle choices that can be changed.
Employee wellness programs that promote healthy lifestyle shifts like smoking cessation, weight loss, and increased physical activity can reduce the risk of these conditions and in turn, decrease the associated costs. Cutting employee absences due to chronic illness, for example, could save U.S. employers over $36 billion a year.
Facilitating early treatment
Preventative screenings are a critical component of employee wellness programs, enabling early detection that can avert high-cost treatments down the road. Removing a precancerous mole found during a skin cancer screening, for example, can prevent the need for costly and invasive treatments like chemotherapy later on.
A Case Study:
A government employer in Wisconsin is a perfect case study of how investing in preventative care can have a significant payoff.
Walworth County was able to save $4.79 in healthcare costs for every $1 it invested in employee risk assessments for conditions like high blood pressure and high cholesterol. The cost sayings weren’t the only benefit—a number of employees who participated in the program were able to ultimately eliminate their risk factors by adopting healthier habits.
Decreasing utilization of expensive services
Preventative services and primary care are much less costly than emergency interventions.
Offering flexible wellness benefits like telemedicine services can encourage team members to keep up with their regular well visits and prevent more expensive claims from urgent care providers and hospital ERs. Wellness programs that include mental health support, like counseling and stress management, can help employees avoid expensive psychiatric inpatient stays.
Cutting absenteeism and improving productivity
Employer healthcare costs go beyond insurance claims and premiums. The costs of lost productivity and absenteeism are steep.
Productivity losses from unnecessary absences cost organizations more than $225 billion a year in the U.S. Presenteeism–a term that describes when employees work while sick–costs an additional $150 billion to $250 billion annually.
Another gain to be made from employee wellness programs is improved morale. When companies invest in employees’ well-being, those workers have the potential to feel more valued, which can help make them more engaged with their jobs (an additional productivity win!).
Reducing health insurance premiums over time
Wellness programs promote healthier workforces. Healthier workforces have fewer healthcare claims, which drives down long-term costs for their companies. Over time, these savings compound, not only reducing insurance premiums, but fostering a sustainable wellness culture that strengthens both financial stability and employee well-being.
Cut Healthcare Costs While Maintaining High-Quality Care With Agile Telehealth
An employee wellness program can promote healthier, more productive teams while reducing costs for employers. Agile Telehealth makes it easy to give your employees on-demand access to a wide range of health services at little to no cost to the organization.
Our programs help organizations achieve cost savings through:
- Virtual screenings that enable early intervention
- Ongoing Care Coaching to ensure treatment success
- Mental health support to reduce burnout and address conditions like anxiety and depression
- Support for healthy lifestyle changes like weight loss
- Convenient access to prescription medications
- And more!
Explore our offerings and fill out a form to speak with one of our specialists today.
