Gallagher Benefit Services is continuing to see big increases in health benefits costs, creating opportunities for benefits advisors, as well as challenges for employers.
William Ziebell, the chief executive officer of Gallagher’s employee benefits consulting and brokerage business, gave that assessment last week during a meeting the parent company, Arthur J. Gallagher & Co., held with investors. The meeting was streamed live and a recording was posted on its website.
Ziebell talked both about the cost of fully insured group health insurance and prices for the stop-loss policies that employers with self-insured health plans use to protect the plans against catastrophic losses.
See also: Stop-loss insurers are using new tools to ‘laser’ out more patients
“In stop-loss, we’re seeing average premium increases in the mid-teens, in some cases, above 20%,” he said.
That translates into increases ranging from about 13% to more than 20%.
“Fully insured renewals at our largest carriers are showing high single-digit to roughly 10% premium increases,” Ziebell said.
That statement implies increases ranging from more than 7% to about 10%.
“These trends are driven by increased utilization, including the number of diagnostics and treatments, health provider consolidation and hospital workforce shortages, and higher utilization of higher-cost drugs, including GLP-1s,” Ziebell said. “Elevated health program cost pressure is likely to remain with us in the near to intermediate-term.”
As stop-loss conditions worsen, strategies are sought
Ziebell said conditions mean that employers want to hear benefits strategy ideas.
“Employers are managing medical inflation, pharmacy cost pressure, workforce retention and regulation at the same time,” he said. “The more complex those decisions become, the more they rely on advice, analytics and execution.
The backdrop: Ziebell is just the latest executive to talk about challenging conditions in the health benefits market.
Brian Evanko, the president of Cigna, recently said he thinks that stop-loss prices will continue to soar in 2027 but might settle down in 2028.
Analysts at Tokio Marine HCC, a big stop-loss issuer, have reported that they think that 2025 stop-loss cost increase trends were surprisingly high and that the market will continue to tighten.
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