A new study conducted by J. Price McNamara reveals that prescription drug costs are not just reshaping employer health benefits—they are redefining the entire structure of workplace healthcare. With premiums climbing, deductibles rising, and specialty drugs consuming a growing share of budgets, employers are being forced into difficult choices that will reverberate across the labor market.
The Premium Squeeze
The average family health premium rose from $25,572 in 2024 to $27,362 in 2025, a 7 percent increase that outpaced both wage growth and inflation. Worker contributions also rose, while deductibles climbed to nearly $1,800 for single coverage, up almost 50 percent in a decade.
This squeeze is not temporary. Forecasts suggest that premiums will continue to rise by more than 6 percent annually through 2026, marking the first time in decades that back-to-back increases of this magnitude have occurred.
The Prescription Drug Explosion
Prescription drugs are the single largest driver of these increases.
- GLP-1 medications for diabetes and weight loss now cost employers more than $1,000 per patient per month.
- Specialty oncology and autoimmune drugs, along with biosimilars, account for over half of all prescription spending.
- Gene therapies, priced at $1–3 million per treatment, pose existential risks for self-insured employers.
The study notes that 70 percent of benefit executives expect gene therapy to become a major financial challenge by 2027, potentially leading to reduced coverage or exclusions.
Employers Respond with Plan Redesigns
To offset these costs, employers are redesigning health plans at record levels.
- In 2025, 45 percent of large employers implemented cost-sharing changes.
- By 2026, that number will rise to 51 percent.
These changes include higher deductibles, copays, and out-of-pocket maximums, as well as narrower provider networks. Employers are also exploring variable copay models, level-funded self-insured plans, and expanded supplemental benefits such as accident and critical illness coverage.
Telehealth as a Cost-Control Tool
Telehealth is emerging as a key strategy for managing costs.
- Between January and June 2024, telehealth usage rose 2.3 percent, with mental health accounting for 68 percent of claims.
- By 2025, all U.S. hospitals offered or planned to offer telehealth, with 41 percent expecting to deliver more than 20 percent of care virtually.
Employers are increasingly integrating telehealth into high-deductible plans, making it a standard rather than a perk. High-performance networks, which save 11–20 percent on costs, are also gaining traction.
Mental Health Under Pressure
The study highlights a looming crisis in mental health coverage.
- 57.8 million U.S. adults experience mental health challenges annually.
- 36 percent report difficulty accessing care due to provider shortages.
- Federal funding cuts of $1.3 billion in 2026 will further strain resources.
Employers are responding with digital stress management programs, but engagement remains low. Only 40 percent of large employers train managers to recognize mental health issues, leaving a significant gap in workplace support.
Regulatory Shifts and PBM Reform
Pharmacy benefit managers are under increasing scrutiny. New federal and state regulations will require PBMs to pass rebates directly to employer plans and disclose all fees. While these reforms aim to reduce costs, they could also disrupt existing pricing structures and force employers to renegotiate contracts.
The Broader Economic Impact
The study suggests that rising healthcare costs could reshape the labor market itself. Nearly three in four employees say they would stay in a role if benefits were better tailored to their needs. Employers that fail to adapt risk higher turnover, while those that innovate with flexible, personalized benefits may gain a competitive edge.
The ripple effect extends beyond the workplace. As costs shift to employees, household budgets will be strained, potentially reducing consumer spending and slowing economic growth.
Conclusion
The study conducted by J. Price McNamara makes clear that prescription drug costs are not just a healthcare issue but an economic one. Employers face
