Healthcare costs keep climbing, and for many employers, it feels like there’s no way out. Family premiums have risen more than 50% in the past decade with another projected increase of nearly 10% in 2026, pushing total annual healthcare spend to nearly $18,000 per employee.
Faced with relentless increases, employers are often told there’s only one way to control costs: cut benefits, shift more costs to employees or brace for bigger renewal hikes. Those assumptions sound logical — but they’re misleading. And when employers act on them, the consequences show up fast in turnover, morale and long‑term healthcare spend.
Why do these myths stick? Healthcare pricing is complex, opaque and often frustrating. Employers are left with limited visibility and fewer real choices — or so it seems.
But the truth is, there are better ways to control costs without sacrificing employee well-being or competitiveness.
Here are three common healthcare cost myths — and the reality behind them.
Myth #1: You have to cut benefits to save money
Reality: Cutting benefits may reduce costs in the short term, but it often drives higher expenses over time — through turnover, lost productivity and delayed care.
Nearly half of adults delay care because they can’t afford it, and 41% carry medical debt. When benefits are reduced, employees feel the impact immediately — skipping preventive care or postponing treatment. Over time, those delays allow minor issues to become costly claims down the road. Financial stress also affects focus, morale and overall well‑being, all of which can hurt performance.
Just as important, shrinking benefits makes it harder to retain talent. Replacing an employee can cost anywhere from 50–200% of their annual salary, factoring in recruiting, onboarding, training and lost productivity. In today’s competitive labor market, benefit reductions can quickly push high performers to look elsewhere.
That’s why many employers are shifting away from cuts and toward smarter cost‑containment strategies — such as self‑funded plans and targeted solutions designed to reduce claims spend without sacrificing coverage. These approaches help control costs while supporting employee health, engagement and retention.
Myth #2: Traditional carrier plans guarantee fair pricing
Reality: Traditional plans may promise big discounts, but those discounts are based on inflated, arbitrary charges. Even after so-called “negotiated rates,” employers often pay far more than the actual cost of care.
The real problem is transparency — or the lack of it. Traditional plans offer little to no visibility into cost or utilization, leaving employers to make decisions in the dark.
Without pricing standards, the same procedure can cost wildly different amounts — sometimes within the same health system or region. In one health system, for example, a C‑section ranged from $7,634 to $70,553. In another example, knee surgery cost $750 cash at one hospital — and $37,389 through insurance just 75 miles away.
When employers can’t see what drives spending, effective planning becomes nearly impossible. Budgeting turns into a guessing game, and renewal increases feel inevitable. Understanding these gaps is the first step toward smarter cost control — and toward asking better questions about how your plan really works.
Myth #3: Rising healthcare costs are inevitable
Reality: Many employers assume there’s nothing they can do — but rising costs aren’t inevitable.
Traditional carrier plans were never designed for long‑term cost control. They rely on opaque pricing, prioritize negotiated discounts and offer limited insight into what actually drives spending. Over time, that lack of visibility makes year‑over‑year increases feel unavoidable.
When employers can’t see what drives spending, effective planning becomes nearly impossible. Budgeting turns into a guessing game, and renewal increases start to feel like the cost of doing business rather than a solvable problem.
But employers have more options than they may realize. Companies that rethink how their health plans are structured — and how care is paid for and managed — are already seeing meaningful results. By gaining better insight into claims data and using benchmarks grounded in reality (rather than arbitrary charges), some employers are achieving savings of 15–30%, even as healthcare costs continue to rise across the industry.
So, what does smarter cost control actually look like in practice?
- Self-funded health plans give employers flexibility and claims visibility, so they can understand what drives costs and make informed decisions.
- Reference-based pricing (RBP) pays providers based on fair market value rather than inflated billed charges, helping create more consistent and predictable healthcare costs.
- Care management and advocacy support employees through complex health events, improving outcomes while reducing unnecessary utilization and spend.
Employers using these strategies often reinvest savings into richer benefits, wellness programs or even zero-premium coverage for employees. The result isn’t just lower healthcare costs, but stronger retention, higher engagement and a more competitive employer brand.
The bottom line
You don’t have to accept rising costs as inevitable — and you don’t have to cut benefits to remain competitive. Employers across industries are finding ways to take back control, protect their workforce and reinvest savings where they matter most.
Healthcare costs continue to rise year after year — and waiting to act only makes cost control harder. Now is the time to rethink your approach.
Want to learn more?
Explore real employer success stories and see how organizations are taking back control of healthcare costs — saving millions without cutting benefits or compromising care.
