Employer-sponsored health coverage remains the foundation of the U.S. healthcare system. But rising costs and policy changes are putting this model under growing strain.
Healthcare spending continues to rise, driven by higher use of care, hospital price growth, specialty drug spending, and workforce pressures. Medical trend, which reflects underlying healthcare cost growth, remains elevated. PwC’s Health Research Institute projects medical cost trend in the employer-sponsored market at 8.5 percent in 2026, reflecting continued pressure from utilization, specialty drugs, and the rising cost of care. Employers feel these increases directly through higher premiums, even though many of the biggest cost drivers sit outside their control.
Care utilization has also been unpredictable. Use of care dipped during the COVID pandemic but then rebounded quickly, creating volatility that employers are still managing today.
Policy decisions add another layer of pressure. In Washington state, new and expanded taxes have increased operating costs for businesses and not-for-profit health plans. At the same time, public programs such as Medicaid and Medicare often reimburse providers below the full cost of care. As enrollment in these programs grows, financial pressure builds across the healthcare system. Those pressures frequently show up in the commercial market, where employers and families experience higher costs.
Federal policy changes also influence affordability. The expiration of enhanced Affordable Care Act premium tax credits is expected to make coverage less affordable for some people. The Urban Institute estimates this could increase uncompensated care by $7.7 billion in 2026. When providers are not fully paid for care, those costs do not disappear. Instead, they add strain across the system and contribute to higher costs over time.
Together, these forces make it more difficult for employers to offer affordable benefits while competing for talent and investing in their workforce. Workers feel the impact as well through higher premiums and growing out-of-pocket costs.
How Premera is responding:
Premera is focused on helping protect the long-term sustainability of employer-sponsored coverage by:
- Partnering with employers to better understand cost drivers and design coverage that balances access, value, and predictability
- Engaging with policymakers and regulators to highlight how policy decisions affect affordability for employers and families
- Advancing transparency and accountability in healthcare pricing, particularly where consolidation and market power drive higher costs
