Amwins Benefits, the accident and health division of Amwins, has released its inaugural State of the Market Report with some stark figures for the industry.
National healthcare expenditures now account for roughly 18% of US gross domestic product and are projected to reach 20% by 2033, according to the report. Private health insurance spending reached $1.645 trillion in 2024, an 8.8% increase from the previous year.
Looking ahead, median medical plan costs are expected to rise 6% to 9% in 2026, which the report said could represent the highest annual renewal projections in more than a decade. Carriers are building in buffers, applying medical cost trends of 10% to 12% in formula renewals to hedge against volatility. Final rate increases in the small-group market were about 11%, while individual ACA Marketplace premiums rose an estimated 26% for 2026, coinciding with the December 2025 expiration of enhanced premium tax credits.
Prescription drug spending remains the fastest-growing category, with plan costs expected to increase by an estimated 11%. Specialty drugs account for less than 2% of all prescriptions but nearly 50% of total drug spending, the report found.
Several legislative developments are reshaping the pharmacy benefits landscape. In February, Congress enacted laws expanding pharmacy benefit manager transparency requirements under ERISA, mandating detailed disclosures on rebates and spread pricing. During the same month, the Federal Trade Commission reached a settlement with Express Scripts requiring point-of-sale rebates to be passed directly to patients.
Separately, the bipartisan Break Up Big Medicine Act, introduced by Sens. Elizabeth Warren and Josh Hawley, seeks to require insurers and pharmacy benefit managers to divest pharmacy operations within one year.
About 67% of US workers are enrolled in self-funded health plans. The stop-loss market is growing at a 15% compound annual growth rate and is projected to reach $113.5 billion by 2034, according to the report.
In the small- to mid-market segment, major carriers have cited substantial losses, deteriorating risk pools, and higher-than-expected utilization as drivers of above-average rate increases. The report said these pressures are disproportionately affecting small businesses and increasing interest in level-funded plans, alternative risk arrangements, and captive insurance solutions.
