What the 2026 Segal Health Plan Cost Trend Survey covers

You’ll learn key findings about trend projections and cost drivers, including:

• For 2026, the highest projected rate of increase for health benefit plan cost trends continues to be prescription drugs at double digits.
• Specialty drug trend is projected to be nearly a percentage point higher than the trend for all outpatient prescription drugs.
• The primary driver of projected specialty drug trend is increased utilization of new high-cost specialty drugs replacing lower-cost therapies. Trend attributable to utilization accounts for 62 percent of the specialty drug gross cost-trend increase before rebates.
• Medical plan cost trends are projected to increase by a median of 9 percent, marking the highest annual projection in more than a decade.
• The projected trends for PPO/POS plans and HDHPs are similar, with the projected trend for HMO/EPO plans not far behind.
• Unit cost, including factors like price inflation, is still the primary driver for inpatient hospital trends.
• Utilization is becoming a key driver in physician trends.
• Most dental plan trend projections are the same as last year’s projections. The exception is schedule of allowance plans. For those plans, the 2026 projection is 1.5 points higher than the 2025 projection.
• For vision plans, 2026 trend projections are consistent with 2025 projections.
• Respondents project that 2026 Medicare Part D costs for Medicare-eligible retirees will be slightly lower than in 2025, while costs for Medicare Advantage (MA) PPO, MA HMO and Medigap plans are expected to rise.

Impact of three recent developments on 2026 trend projections

Survey participants were asked about emerging regulatory changes and whether these would be a factor contributing to 2026 allowed medical and/or prescription drug costs, including tariffs, scaling back of prior authorization (PA) and changes to Medicaid spending.

Top health plan cost-management strategies plan sponsors are using this year

Survey respondents identified the top five strategies for managing the cost of medical benefits and the top five pharmacy strategies for managing the cost of pharmacy benefits that plan sponsors are using this year.

Most of these cost-management strategies will still be relevant for 2026 — and beyond.

Data on actual 2024 trends

To assess the accuracy of trend projections, we compared 2024 projected trends for medical, Rx and dental plans from a prior survey to the actual average trends for 2024 (the most recent period for which actual data is available), as reported by the survey respondents.

The report also presents actual 2024 trend data from Segal’s health data warehouse, SHAPE (Segal’s Health Analysis of Plan Experience) on:

• Medical trends by site of service (inpatient, outpatient and professional
• Mental health services, which are driving the increase in healthcare utilization, and the five conditions that are the main drivers of mental health cost trends
• The much higher prescription drug trends for plans that cover anti-obesity medications
• The top 10 drugs currently driving prescription drug plan costs before rebates
• How biosimilar adoption varies widely by PBM

A three-pronged approach to healthcare cost management

In industries grappling with a tight labor market, plan sponsors may hesitate to shift rising costs onto participants. Implementing effective cost-management strategies can help sustain manageable trend levels and reduce the need to increase participant cost sharing. The survey report outlines strategies plan sponsors can use to monitor and manage cost trends over time.

We recommend a balanced, three-pronged approach to effective healthcare cost management. It involves managing plan design/networks, vendors and population health.

Data analytics are central to supporting each of those cost-management strategies. Regular monitoring of actual health plan claims is essential for plan sponsors to uncover emerging cost drivers.

What is trend?

Health plan cost trend is the measure of increases in allowed per capita claims cost. Allowed per capita claims cost is eligible billed charges (before participant cost sharing) less provider discounts.

Multiple factors influence trend, including new treatments, therapies and technologies, medical price inflation, and provider cost shifting from reduced payment by Medicare and Medicaid, to name just a few.

Although there is usually a high correlation between a trend rate and the actual cost increase assessed by a carrier, trend and the net annual change in plan costs are not the same. A plan sponsor’s costs can be significantly different from projected claims cost trends.