Rising health care costs could take a bigger bite out of workers’ paychecks

August 30, 2026 - 21:29

Workers could see a larger portion of their earnings go toward health coverage in the coming year, according to a new analysis. Otto Graham, a benefits consultant, points to two main factors behind the trend: the climbing price of prescription drugs and a noticeable increase in how often people use medical services. Together, these forces are pushing up the total cost of care, and employers are expected to pass more of that burden onto their staff.

Graham notes that while companies have historically absorbed a significant share of premium increases, that cushion is getting thinner. Many firms are now adjusting their budgets to account for higher claims, which often translates into higher deductibles, larger co-pays, or smaller raises for workers. The effect may not be immediate, but over the next year or two, employees could feel the pinch in their regular paychecks.

The analysis also highlights a shift in how care is delivered. More people are scheduling elective procedures and follow-up visits that were delayed during the pandemic, and that surge in activity is straining the system. At the same time, newer, more expensive specialty drugs for conditions like diabetes and autoimmune disorders are entering the market. Graham says these are not one-time spikes but structural changes that will keep costs elevated for the foreseeable future.

For workers, the advice is to review their benefits options carefully during open enrollment and to consider health savings accounts if available. Even small changes, like choosing a generic drug or using an in-network provider, can soften the blow. But Graham warns that without broader reforms, the trend is likely to continue, meaning employees should expect to budget more for health care each year.