When safe health plan adjustments stop working, go bold
As health care costs rise, employers may need bolder strategies to help keep plans sustainable while supporting the employee experience.
As health care costs continue to climb, sticking with familiar plan adjustments may feel like the safer choice. But when costs keep outpacing forecasts, small changes may only buy time instead of addressing what is really driving trend.
That doesn’t mean employers need to make reactive or disruptive moves. The stronger approach may be to pause long enough to look beyond a single year of data, identify the cost drivers that matter most and choose strategies that can support long-term sustainability without creating unnecessary friction for employees.
PwC projects group medical cost trend to reach 9% in 2027, with pharmacy, provider reimbursement pressure, AI-enabled revenue optimization, behavioral health and out-of-network reimbursement dynamics all contributing to cost pressures.1 Business Group on Health reports that employer health care costs came in higher than projected for 3 consecutive years, adding more uncertainty to benefits planning.2
That volatility is pushing employers beyond incremental adjustments. “Managing trend is no longer really a viable path,” explains Jim Winkler, chief strategy officer for Business Group on Health. “Employers may need to take a closer look at their existing plans and be prepared to make bold moves, if necessary, to accomplish the task ahead.”
For employers, the question is not just whether to make broad changes, but which changes are most likely to address the cost drivers behind their trend. Taking a stronger approach does not mean making disruptive changes just to prove a point. It means being willing to question familiar approaches when they are no longer enough. Small plan design changes, short-term cost shifting or one-year reactions to trend may buy time, but they may not address the forces driving costs higher.
This could mean reevaluating funding strategy, leaning into high-performance networks, using Centers of Excellence (COEs), adopting site of care strategies, tightening pharmacy management or strengthening vendor accountability — all while helping employees make more informed decisions about quality, cost effective care.
| Strategy | Potential opportunities | Potential challenges |
| High-performance networks | ||
| 25% of employers had high performance networks in place in 2026, with 6% adding them in 2027 and 27% considering them for 2028/20292 | Can help lower costs by guiding members to quality, cost-effective providers through tiered or curated network designs | May limit provider choice; requires clear communication to avoid employee confusion |
| Centers of Excellence (COEs) | ||
| 84% of employers expect to offer at least one COE in 20272 | Can improve quality for high-cost procedures; may offer bundled pricing and better outcomes | May require employees to travel; adoption can be slow if employees are attached to their local providers |
| Site of care strategies | ||
| 82% of employers say navigation to quality sites of care can significantly impact care quality2 | Can reduce costs by helping navigate or redirect members to lower-cost settings when clinically appropriate; may support safer, more convenient care | Requires education and navigation support; employees may need help understanding why a setting change is recommended or more beneficial to their health and wallet |
| Tighter pharmacy management | ||
| U.S. prescription drug spending reached $805.9B in 2024, up 10.2% from the previous year3 | Can help manage drug spend through formulary, specialty and cross-benefit oversight; integrated medical and pharmacy benefits may uncover savings opportunities and enable more coordinated care | May disrupt members when medications change; requires clear communication and clinical oversight |
| Funding and plan design changes | ||
| 26% of employers are offering or planning to offer an alternative health plan by 2027, while 31% are considering one for 2028/20292 | Can help employers reassess how risk, flexibility, data access and savings potential align with their workforce and cost goals | May introduce more complexity or disruption; requires careful modeling, vendor coordination and employee communication |
These strategies can create short-term disruption, which is why bold action needs to be grounded in the right context. The goal is not to make bigger changes for the sake of change, but to understand which cost drivers require a different response and how those changes may affect employees. That means looking beyond immediate savings to consider health outcomes, employee satisfaction, communication needs and whether the strategy is sustainable over time.
“It can be difficult for employers to accurately gauge a health trend after 1 year. That data can be skewed by a number of factors,” explains Craig Kurtzweil, chief data and analytics officer for UnitedHealthcare Employer & Individual. “Evaluating data over multiple years may help employers distinguish between a temporary spike and a pattern that calls for a different strategy.”
In other words, rather than judging a solution on first-year costs alone, employers should consider what each stage of implementation can reasonably show. In year 1, engagement and utilization are often the clearest signals. By year 2, a fuller cost picture can start to emerge. By years 3–5, employers are better positioned to assess whether a program is delivering value, needs adjustment or should be replaced.
“It’s easier, in a certain way, to drive real change when the fire is visible, the smoke is visible, the flames are hot,” Winkler notes. The current cost environment gives employers that urgency.
The opportunity for employers is to respond to the heat in a timely manner but also ensure decisions are grounded in data, tied to clear goals and practical for the people who rely on the plan.
“We’re looking at the UnitedHealthcare portfolio through the lens of what each solution is meant to do, how it supports members and employers, and whether it helps make health benefits clearer and easier to use.”
Key takeaways for employers
As employers reevaluate their health plan strategy, they may want to:
- Put the full strategy on the table: Rising costs and missed forecasts may call for a broader look at plan design, funding strategy, networks, pharmacy management and vendor relationships instead of isolated adjustments
- Match the response to the cost driver: Persistent cost pressure may call for different levers, from pharmacy management and site of care strategies to COEs, vendor accountability or funding model changes
- Use multiyear data to support decisions: Looking at data across several years may help employers separate one-time spikes from patterns that need a different strategy
- Weigh the employee impact: Larger plan changes may create short-term disruption, so clear communication and navigation support are key to help reduce confusion and friction
- Avoid trading one problem for another: Cost pressures may require bold action, but decisions tied to long-term goals may be more durable than quick fixes that create more disruption later
“Employers are starting to challenge strategies they may not have been willing to touch in the past,” Kurtzweil says. “With cost pressures continuing, the status quo is becoming harder to defend. The opportunity now is to use the data differently and focus on strategies that can have a more meaningful impact over time.”
And that responsibility does not have to fall on employers alone. Carriers also need to step up and think differently about how their portfolios can help employers respond to today’s cost pressures. For UnitedHealthcare, that means continuing to evaluate its solutions to help ensure employers have options that reflect what they may need now and in the future — with more direct and creative ways to address costs while still supporting the people who use the plan.
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