A new chapter begins
Employers face persistent double-digit medical trend rate increases and insurance coverage gaps in 2026, according to Mercer Marsh Benefits’ Health Trends report
NEW YORK, October 21, 2025 — Mercer Marsh Benefits, a combination of experts from Marsh McLennan businesses (NYSE: MMC), today released its 2026 Health Trends report, sharing insights from a survey of 268 insurers across 67 markets. The report projects that medical trend rates, which reflect the year-over-year cost increase per person for health benefits claims, will exceed 10% in most regions for the sixth consecutive year, driven by inflation, utilization changes and evolving treatment mixes.
The report highlights that while cancer, diseases of the circulatory system and musculoskeletal conditions remain the top causes of claims by amount spent, the financial pressures on employer-sponsored health plans, such as inflation and more costly treatments, are intensifying. In addition, occupational risks, including job demands and exposure to noise and air pollution, have emerged as significant contributors to rising claim costs.
Hervé Balzano, Mercer Marsh Benefits’ Global Leader and Mercer’s Health President, commented: “For the first time in four years, insurers are anticipating a shift towards employers reducing coverage to manage costs, as opposed to making plan improvements. While reducing coverage may deliver employers short-term budget relief, the move can damage the employee experience and their financial security, as well as weaken the company’s ability to attract and retain talent.”
“Our experts are working with clients to find opportunities to optimize plans and maintain uninterrupted access to high-quality health care to safeguard employee well-being and address financial challenges,” Mr. Balzano continued.
The report also underscores persistent gaps in benefits coverage, particularly for mental health, reproductive health and support for an aging workforce. While half of insurers globally include mental health counseling in their plans, only about a third include coverage for mental health medication, and just a quarter typically include mental health screenings within their plans.
As individuals delay retirement and stay in the workforce longer, targeted benefits can play a major role in helping employees remain healthy, engaged and productive. Preventive care, such as cancer screenings and routine primary care visits, can help catch health issues early, reducing future costs and supporting long-term wellness.
Amy Laverock, Mercer Marsh Benefits’ Global Advisory Leader, added: “With two-thirds of markets facing double-digit medical trend rates in 2026, organizations must prepare for higher costs and think carefully about how to balance cost management with employee wellness. Investing in preventive care and encouraging the use of effective, quality care can address both challenges.”
Looking ahead, the report finds that 76% of insurers are concerned about inefficient and wasteful care driving unaffordability, and many are expecting employers to prioritize cost management initiatives, such as better management of serious claims. Adopting innovative cost-containment strategies and proactive risk management will help employers maintain affordable and effective health benefits.