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Medical costs will be an issue in the 2026 midterm elections.
Democrats want to extend the ACA (Obamacare) taxpayer subsidy, but Republicans refuse to address and improve the situation despite their calls to fix the problem.
It’s hurting businesses and consumers. As employer health care costs continue to rise, companies increasingly shift higher premiums, deductibles, and pharmacy costs to employees.
Annual health care costs for a family of four on an employer-sponsored plan have risen to nearly $38,000, the steepest increase since the pandemic, according to a recent report.
Some insurance companies expect premiums to increase by 13% in 2027.
What is driving up costs?
Prescription drug and outpatient spending accounted for 69% of the overall cost increase, with GLP-1 drugs such as Ozempic, Wegovy, and Zepbound emerging as the primary driver of pharmacy spending growth.
For example, in 2005, employers paid 61% of health care costs, but that proportion will fall to 58% in 2026, and employee contributions will now rise from 21% in 2005 to 27%.
To combat rapidly increasing health care costs, federal and state lawmakers and regulators are scrutinizing the role of pharmacy intermediaries, known as pharmacy benefit managers (PBMs), through reforms such as the Exclusive Pre-Patient Act and the Consolidated Appropriations Act of 2026 (CAA).
PBMs manage nearly all prescription drug claims nationwide, sitting between employers, insurance companies, drug manufacturers, and pharmacies, directing pricing, coverage, and access decisions with opaque rebate structures for employers who pay the fees.
Paul Pruitt, co-founder of SHARx, a specialty pharmacy advocacy and procurement service, says medical costs are increasingly a business risk issue for employers, not just an HR issue.
Pruitt argues that many companies still lack transparency about how prescriptions are priced or how rebates pass through the system, and forward-looking companies need to demand transparent pass-through pricing models and explore alternative and ethical sourcing strategies for specialty drugs.
