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The overall increase in the cost of healthcare, or medical cost trend, could be about 8.5 percent in 2026, according to a new report from analysts at PwC. The medical cost trend is designed to show how much a health plan’s medical claim costs would change from year to year if it kept its plan design the same.
The new cost trend projection is about the same as what the PwC analysts have been seeing in the U.S. group health market this year. But the cost inflation has disappointed analysts: A year ago, market analysts were hoping employers could hold the 2025 medical cost trend to 8 percent.
Looking forward, one force that could increase employers’ health plan costs is a looming cut in federal spending on Medicaid and Affordable Care Act subsidies. If federal policy changes increase the number of hospital patients who have no health insurance, that “could lead to an increase in uncompensated care sought by the uninsured, thus pressuring hospitals to seek higher rates in contract negotiation and driving increases in medical cost trend,” the PwC analysts write.
If the Trump administration imposes new tariffs on imported drugs and medical devices, that could also increase employer health plan spending, the analysts write. They see the high cost of the new “cellular, gene, and RNA therapies” used to treat conditions such as sickle cell disease, hemophilia, and muscular dystrophy as an emerging healthcare cost driver. For example, a new form of sickle cell disease gene therapy, Lyfgenia, can cost $3.1 million for a one-time infusion, and about 16,000 U.S. patients may be good candidates for that therapy. Another new gene therapy treatment, Elevidys, can help people with Duchenne muscular dystrophy and costs $3.2 million for a one-time infusion.
“So far, providers are using these therapies sparingly due to safety concerns, uncertain long-term benefits, prescriber caution, and payer hesitancy,” the analysts write. “But physicians and systems could adopt these therapies more widely as clinical evidence matures.”
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From: BenefitsPRO
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