Healthcare costs have been a key challenge for employers in 2025, and this is only expected to continue in 2026, according to Morgan Health CEO Dan Mendelson.
Morgan Health is a JPMorgan Chase business unit focused on employer-sponsored insurance. Mendelson recently released his top trends to watch in 2026 for employer-sponsored health insurance, and how its portfolio companies are supporting these trends:
1. Affordability is a top concern: This applies to consumers, small businesses and large companies. According to the Business Group on Health, employers project a median 9% increase in healthcare costs next year.
“It’s a difficult time for them to absorb these increases, especially given general inflation,” Mendelson said in an interview. “Employers, I think, in particular, are looking at what they’re paying for healthcare and saying it’s got to be better than this, because the costs keep going up, and it seems like the healthcare delivery system continues to deteriorate.”
Morgan Health is an investor in several digital health companies that address these rising costs, including cancer care company Thyme Care and alternative health plan Centivo.
2. Drug costs: As new drugs emerge, managing costs carefully is essential. Employers need to update how they handle risk and provide clinical guidance to ensure patients can access innovative treatments without overspending, especially as more expensive medications become available. GLP-1 costs will also continue to be a focus for employers.
Morgan Health portfolio companies addressing high drug costs include Aradigm, which is focused on cell and gene therapies, and Thyme Care for cancer drugs.
3. Advanced analytics: Leveraging advanced analytics is essential to providing higher-quality care, and AI will continue to make waves in administrative and clinical settings. Morgan Health portfolio companies that tackle these areas include Merative, which curates data for employers, and Personify Health, which uses AI to personalize care for patients.
4. Small businesses need support: Small and mid-sized businesses are expected to face double-digit premium increases. This is a group that Morgan Health is particularly focused on supporting, according to Mendelson, and the company is an investor in Venteur, which offers ICHRA solutions for small businesses. ICHRAs (Individual Coverage Health Reimbursement Arrangements) allow employers to offer their employees pre-tax dollars to purchase health insurance.
“Anybody who has ever run a small business has struggled with the cost of providing coverage for workers, and the products that small businesses are being offered are generally not as strong as what large businesses can access,” Mendelson said.
5. A shift toward consumer-focused care: People want more control and support in their healthcare decisions, which companies like Personify Health and Fuze Health address, according to Mendelson. The latter brings care into patients’ homes.
“Consumers have become accustomed to having a strong level of information in all other domains: in shopping, going online to find gifts for loved ones during the holidays; in banking, seeing your information,” he said. “In healthcare, consumers have not been given a lot of power up until relatively recently, and a lot of the power that consumers have is coming from AI. … The shift that we anticipate over the next couple of years is that consumer health benefits are going to increasingly be able to empower people to make good health care decisions, and part of it is getting information to consumers within their own workflow.”
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