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Rising health-care expenses as part of an overall increase in the cost of living are forcing some Americans — including higher earners — to make tough financial choices.
In 2026, employees could see their total health benefit cost increase by 6.7% on average, pushing the average cost per employee above $18,500, according to global consulting firm Mercer. It’s the steepest jump in 15 years, the firm said.
This year, premiums for families with employer-sponsored plans rose 6%, more than twice the rate of inflation, at 2.7%, and outpacing wage growth of 4%, according to KFF, a nonprofit health policy research firm. The vast majority of Americans, about 165 million people, including employees and their dependents, obtain health insurance through their employer.
It’s not only the cost of coverage that’s going up. Consumers are also using more medical services and prescriptions, experts say, contributing to higher health-care expenses.
“We’re getting older as a population. So there’s going to be ailments, there’s more heart disease, there’s more diabetes, all of those things are trending higher, hence additional usage,” said Kaleialoha Cadinha-Pua’a, CEO and chief investment officer of Cadinha & Company in Honolulu, which is ranked No. 15 on CNBC’s Financial Advisor 100 list for 2025.
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About 21% of all adults surveyed said health care and insurance are the expenses that have increased the most for them amid the rising cost of living, according to the 2026 KeyBank Financial Mobility Survey. Among higher earners, or those making $100,000 a year or more, 30% rank health care and insurance as the most impactful expense in their cost-of-living increase.
The online survey polled more than 1,000 Americans ages 18 to 70 in July who have sole or shared responsibility for financial decisions in their household.
As a direct result of the rising cost of living, 26% of all adults surveyed said they’ve drawn from emergency savings, and 12% have reduced retirement contributions to their 401(k) or IRA. Among those making $100,000 or more, 19% said they have reduced retirement contributions.
Managing the rising costs of living is “a constantly moving goal,” Cadinha-Pua’a said. “More investors now are having to worry about all these moving pieces and all these varying sizes of eggs in their baskets.”
Even as some Americans make intentional trade-offs to keep up with daily expenses, they’re still watching their savings shrink, according to the KeyBank survey. Two-thirds of those polled said they have less money in their savings in 2025 than they did last year.
Experts we spoke with recommended taking these steps to manage increasing health-care costs.
Know your health plan costs, and what’s changing
Take time to understand all the costs of your health-care plan.
“The vast majority of people I speak to — and I don’t care how well-educated they are, I don’t care how much they earn — they don’t understand what’s in their health care. Until something happens,” said Mary Clements Evans, a certified financial planner and owner of Evans Wealth Strategies in Emmaus, Pennsylvania.
Among the terms to know:
- Copayments are fixed amounts you pay for specific services, such as a prescription or a doctor’s visit.
- Deductibles are the amount you pay for medical expenses before insurance coverage begins.
- Co-insurance is the portion of health costs that you share with the insurer, once you have reached your deductible.
- Out-of-pocket maximums are a cap on the expenses you’ll pay for the plan year, but they don’t include premiums or any services not covered.
“They might be going along, everything’s fine, and then, you know, stuff just happens, and we end up in the emergency room, or we end up with a surgery, and now all of a sudden, they’re getting a bill for $5,000 and they’re stunned,” said Evans, who is also the author of “Emotionally Invested.”
Employers may change some of the plan terms — often, deductibles — to prevent premiums from rising further, whic