Employer Health Benefit Costs Surge, Shifting Burden to Workers
A new Mercer survey of 1,700 companies projects the sharpest jump in employer health costs in 15 years, with expenses expected to climb nearly 9% in 2026. To offset the increase, many companies are weighing higher employee premiums, steeper deductibles, and scaled-back benefits. Rising drug prices, expensive new treatments, hospital labor shortages, and post-pandemic demand are driving the trend. Experts warn that as groceries and living expenses also rise, workers may delay or skip needed care. A third of employers are considering narrower, tiered network plans, while others may pass on costs through out-of-pocket charges. Policy shifts, including tariffs on medical supplies and potential Medicaid coverage losses, could further exacerbate pressures.
Key Takeaway: Hospitals and health systems should anticipate heightened patient cost concerns, particularly among commercially insured populations. Delayed or forgone care could increase uncompensated hospital visits and worsen chronic conditions. Providers may need to expand financial assistance, strengthen employer partnerships, and proactively communicate the value of preventive care to counter affordability barriers.
RFK Jr. Adopts Ousted CDC Director’s Reform Agenda, Raising Questions on Motives
Days after forcing out CDC Director Susan Monarez, Health Secretary Robert F. Kennedy Jr. unveiled a sweeping reform plan for the agency, one that closely mirrors a confidential roadmap Monarez submitted weeks earlier. Both plans called for modernized disease surveillance powered by AI, stronger global health security, workforce investment, and safeguards against political interference. Yet Monarez was dismissed after refusing Kennedy’s ultimatum to adopt his revamped vaccine policies and fire senior CDC officials. Her ouster, followed by high-level resignations, has fueled confusion about whether Kennedy’s reform vision is genuinely new or a repackaging of Monarez’s proposals. While Kennedy frames his overhaul as restoring trust and effectiveness, his decision to sideline Monarez has heightened concerns about political motives, particularly as the Trump administration moves to consolidate control over federal health agencies.
Key Takeaway: Hospitals, public health systems, and academic partners face mounting uncertainty over CDC leadership and direction. While Kennedy’s reform plan emphasizes modernization, the abrupt dismissal of Monarez and her alignment with many of the same priorities suggest politics, not policy, may be driving agency turmoil. Health organizations should monitor evolving CDC priorities, anticipate shifts in guidance, and prepare to reassure patients and communities about the stability of public health leadership during this period of transition.
RFK Jr. Faces Senate Scrutiny on Vaccine Policy and CDC Turmoil
HHS Secretary RFK Jr. testified before the Senate Finance Committee Thursday, defending the administration’s 2026 health agenda even as senators pressed him on chaos at the CDC. The hearing followed the ouster of CDC Director Susan Monarez, the resignation of three senior officials, and a broader exodus of roughly 20,000 HHS staff since Kennedy took office. Lawmakers highlighted Kennedy’s reversal on assurances that he would not undermine vaccine confidence: he has fired the government’s top vaccine advisory panel, replaced it with anti-vaccine activists, and limited access to new COVID-19 boosters. Those appointees are expected to review recommendations on COVID, RSV, and measles vaccines this month. While Kennedy downplayed the staff departures, calling them necessary to “fix” the agency, bipartisan concerns are mounting as more than a thousand current and former HHS staff and multiple medical groups call for his resignation. Kennedy also used the hearing to elevate his nutrition agenda, highlighting state-led efforts to restrict food additives and limit sugar consumption.
Key Takeaway: For hospitals and health systems, the upheaval at HHS and CDC injects uncertainty into vaccine supply, coverage, and policy direction at a critical time. Potential changes to ACIP recommendations could disrupt routine immunizations, payer coverage decisions, and patient trust. Health leaders should monitor federal actions closely, brace for shifts in vaccine availability, and expand proactive communication to reassure patients amid political turbulence.
House Republicans Propose One-Year Extension of ACA Subsidies Amid Political Pressure
Ten vulnerable House Republicans introduced legislation Thursday to extend enhanced Affordable Care Act tax credits for one year, pushing the issue beyond the 2026 midterms. The subsidies, first enacted under COVID-19 relief and extended through 2025, have dramatically reduced premiums and driven record ACA enrollment. If they lapse, premiums could jump an average of 18% in 2026, according to KFF. Lead sponsor Rep. Jen Kiggans (R-VA) framed the bill as a measure to shield families from sudden cost increases, even while emphasizing the need to phase out pandemic-era incentives. GOP leaders remain divided, with some citing costs and fraud concerns, and anti-abortion groups lobbying against the measure. Democrats, meanwhile, view the extension fight as politically potent and are preparing to force votes on the issue, warning that millions could lose coverage if Republicans do not act.
Key Takeaway: Hospitals and health systems could face increased uncompensated care and patient coverage losses if subsidies expire. The GOP bill signals recognition of the political and health risks tied to higher premiums, but uncertainty remains as partisan divides and outside opposition complicate negotiations. Providers should prepare for potential insurance churn and higher financial assistance demands in 2026 if no bipartisan deal is reached.
On the Horizon
Congress Faces Sept. 30 Deadline as Health Policies Hang in the Balance: Government funding negotiations this fall will determine the fate of key health care provisions. Expiring enhanced ACA premium tax credits, Medicare and Medicaid extenders, telehealth authority, and community health center funding are all tied to appropriations talks. Lawmakers are also weighing hospital site-neutral payments, Medicare Advantage coding adjustments, and reforms targeting drug middlemen as possible offsets. Meanwhile, the Senate’s HHS spending bill boosts NIH funding and excludes Kennedy’s proposed MAHA agency, while the House may align more closely with the White House’s proposed cuts, setting up a difficult reconciliation process. With ACA enrollment notices going out in November, failure to extend subsidies could trigger steep premium hikes.
Why it matters for hospitals: The outcome of budget negotiations will shape payment, coverage, and program stability across the health sector. Hospitals and health systems should prepare for uncertainty around ACA affordability, Medicare physician payments, and telehealth extensions, while monitoring potential changes to site-neutral payment policy and drug pricing reforms. A shutdown or delayed appropriations could further disrupt grants, research funding, and safety-net programs critical to hospitals and community health providers.
