Healthcare costs are forcing employers to reconsider their benefits strategy

• Key Insight: See why major employers are struggling to negotiate prices with consolidated hospital systems.
• What's at Stake: Workers risk losing wage increases if employers cannot curb rising healthcare expenses.
• Forward Look: Employer experimentation pairing GLP-1 coverage with lifestyle management support.
  Source: Bullets generated by AI with editorial review.

Nearly all those surveyed by the National Alliance of Healthcare Purchaser Coalitions say health and well-being benefits are crucial to attracting and retaining employees, yet 92% say healthcare costs hurt competitiveness and 83% say rising expenses trade off with wage and salary increases. 

"Healthcare affordability is no longer just a benefits issue; it is a business issue, a workforce issue and a wage issue," said Shawn Gremminger, National Alliance president and CEO. "Employers have the concern and the will to act, but too often lack the usable data, contractual rights and staff capacity to do so. When those barriers are removed, employers are better able to move from concern to action. In a challenging economic environment, healthcare costs continue to be the driving factor in inflation, the concern most often cited by Americans going into the pivotal 2026 midterm elections."

Employers cited drug prices (77%), high-cost claims (75%) and hospital prices (68%) as the top threats to healthcare affordability, according to the 2026 Pulse of the Purchaser survey, which polled more than 400 companies. 

Read more: Health benefits spending soars, but employee confusion persists

"A lot of the attempt to address drug prices has to do with switching pharmacy benefit managers or writing better PBM contracts," Gremminger said. 

While drug costs are a major concern, Gremminger said employers should be even more worried about hospital prices, which are much harder to bring down. "The primary reason is that hospital markets are highly consolidated in most metro areas, and most of the time the largest hospital systems are A) high priced and B) so large that you can't really take them out of your network."

"And so they have absolutely no incentive to negotiate on prices because it's like, 'What are you going to do? You're going to take me out of network?'" he continued. "Of course you're not. You can't."

Employers look beyond the big three PBMs

The 2026 survey also revealed continued movement in the PBM market. The share of employers contracting with the big three — CVS Caremark, OptumRx and Express Scripts — fell from 63% in 2025 to 54% in 2026. The shift toward alternative PBMs is driven in large part by smaller employers, particularly those with fewer than 1,000 employees.

Among current big three clients, 56% said they are considering a PBM change within the next one to three years, compared with 31% of employers using other PBMs. The largest employers (10,000 or more employees) are the slowest to move to alternative PBMs but show the greatest interest in changing vendors within the next three years.

"I think that's an indication that they're not happy with the current service offerings they're getting, and I think the big three have a lot of work to do if they're going to maintain the kind of market domination they have," Gremminger said. "They've got a lot of work to do to rebuild trust with large employers around the country. Our goal is not to be anti-big three or to reduce trust, but it is to talk about what a good contract looks like and what an employer should expect from a PBM that is actually aligned with their interests."

The survey also points to a more nuanced approach to GLP-1 coverage. While the share of employers covering the drugs appears to have plateaued at around 50%, employers are increasingly looking for ways to balance demand and clinical value with the high cost of treatment, Gremminger said. Rather than simply expanding or eliminating coverage, many are experimenting with programs that pair GLP-1 coverage with lifestyle management, patient navigation, and other forms of support designed to improve outcomes and reduce unnecessary spending.

Read more: GLP-1s push health plan costs to 15-year high

"I think most of them are like, we get that there is clinical value, and we get that there's a high demand, and so we're seeing a lot of experimentation around sort of point solution vendors that pair coverage of the GLP-1 with a sort of lifestyle management and patient navigator function."