Health care costs keep climbing. M3’s Momentum Report shows +8.64% year over year. 2026 will demand sharper stop-loss strategies, smarter pharmacy moves, and better data. Below are the big ideas from our panel and what employers can act on now.
What’s driving costs?
Large claims are the headline. They are occurring more frequently and with higher severity, creating ripple effects across both fully insured and self-funded plans.
Pharmacy trend remains relentless. GLP-1 medications now average roughly $10,000 per member per year, and new indications continue to expand their use. Specialty drugs, too, remain a leading cost driver.
Complex conditions such as transplants, ESRD, and advanced cancers are exerting outsized pressure on stop-loss performance and renewal outcomes.
Stop-loss in a hard market:
Carriers are adjusting after years of underpriced coverage and elevated loss ratios. The result:
- A typical stop-loss trend of ~15%, with many groups seeing 18–20% increases even without a shock claim.
- Contract protections help. such as “no-new-laser” clauses and rate caps can transform a devastating laser into a difficult, but predictable renewal.
- Captives can soften volatility. Because renewals are tied to your cohort’s performance, not just the broader market, captives are worth a look for groups feeling like a sitting duck for unexpected claims.
Pharmacy:
Control the spend, protect the member
- Start with formulary. Tighten open formularies and steer to lowest-net-cost options; add biosimilars where clinically sound (some swaps save ~$30,000 per member/year).
- Refresh the guardrails. Ensure prior authorization, step therapy, and quantity limits align with today’s evidence and available therapies.
- Use assistance programs wisely. Variable co-pay designs that maximize manufacturer support can yield $80K–$400K+ in annual savings, depending on your population.
- Channel and network choices matter. Specialty pharmacy and selective network narrowing (often while retaining independents) can improve transparency and control net costs.
Networks & care models:
High-performance networks and direct contracting are gaining momentum as employers seek ways to improve quality, access, and affordability.
Pairing these models with direct primary care (DPC) or virtual primary care can steer members toward high-value sites of care — including imaging, musculoskeletal (MSK) treatment, and ambulatory surgery centers (ASCs).
Real-world example:
One member avoided a $70,000 surgery through targeted DPC treatment that cost less than $1,500 — enough savings from one case to fund DPC memberships for an entire organization.
Results vary by market, but the principle is consistent: let data guide your design, and implement changes in manageable phases.
Data: the backbone of every decision
You can’t fix what you can’t see. Choose a broker that uses population health analytics to make your costs visible.
Avoid stacking tools. Choose a few targeted, high-impact strategies and measure their results consistently.
With Broker Analytics, you can focus on a few high-impact strategies, and track results over time.
If you invest in one thing for 2026…
- Sarah: A smarter formulary (plus PA/step/quantity limits) to lock in lowest-net-cost Rx.
- Matt: A two-year stop-loss option (where eligible) to stabilize renewals and avoid lasers mid-strategy.
- Jason: A proactive analytics platform so you target the right interventions for your population.
Key Takeaways
Winning 2026 is about seeing clearly, protecting against volatility, and aligning leadership on cost, coverage philosophy, and member experience. Start with the data, choose a few high-leverage moves, and measure relentlessly.
Length: 57 minutes
