Big employers who've tried to insulate workers from rising health costs are changing their thinking as they face another year of steep increases in 2026.

Why it matters: The added costs in the form of higher premiums will hit workers already reeling from inflationary pressures. But corporations appear unwilling to eat a third year of higher-than-expected benefit costs.

• "The story this year is perhaps more daunting and sobering than it ever has been," Ellen Kelsay, CEO of Business Group on Health, said yesterday.

By the numbers: A survey the group released of 121 large employers insuring 11.6 million people found companies' medical costs sharply outpaced their expectations over the past two years.

• They are now projecting health costs to jump a median of 9% next year absent any cutbacks in benefits to offset the increases.
• Other surveys have projected median increases from 5.8% to 10%.

Between the lines: The cost pressures in some ways mirror the experience in Affordable Care Act and other insurance markets that have seen higher demand for health procedures and tests and rising drug costs.

• Cancer is the top driver of employer health costs for the fourth year in a row, as diagnoses increase and treatment costs grow, according to the Business Group on Health survey.
• Employers have also expressed concerns about pricey biologic drugs, anti-inflammatory specialty drugs and the soaring demand for GLP-1s for obesity.
• In 2024, pharmacy expenses accounted for nearly a quarter of all employers' health care spending (24%), and the companies project an increase of 11% to 12% next year, per the Business Group on Health.

What to watch: Nearly one quarter of large employers will have alternative health plan arrangements in place next year, and another 36% are considering them for the future, the survey found.

• Your employer might even introduce what they call a "high performance network" or "exclusive provider organization" this year.

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An ad-hoc group of doctors and health researchers yesterday held a public meeting to review recent studies on the safety and effectiveness of COVID, RSV and flu vaccines, in the belief the data isn't being adequately considered by federal health officials.

Why it matters: The online gathering of the newly formed Vaccine Integrity Project was intended to provide an evidence base for doctors and public health officials as they update recommendations for kids, pregnant women and immunocompromised people.

• The agenda resembled those of a vaccine advisory board to the CDC that's come under scrutiny since Health Secretary Robert F. Kennedy Jr. purged its 17 members and replaced them with a handpicked roster that includes some known vaccine skeptics.

What they're saying: "Over the last few months, we've seen policy changes by federal officials based on evidence that has been shown as flawed, analytically fraught, or flat-out wrong," said Michael Osterholm, an epidemiologist at the University of Minnesota and a leader of the initiative.

What they did: The group of 24 doctors and researchers from across the country examined scientific studies published since mid-2024 for COVID and RSV vaccines, and mid-2023 for flu.

• Osterholm said there is no scientific evidence to justify Kennedy's recent decision to no longer recommend COVID vaccines for healthy pregnant women or children.

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Federal health officials announced a new push yesterday to ensure that Medicaid and Children's Health Insurance Program enrollees are U.S. citizens or have a satisfactory immigration status.

Why it matters: The effort could create new administrative hoops for enrollees to jump through.

Driving the news: CMS will begin providing states with "monthly enrollment reports identifying individuals whose citizenship or immigration status could not be confirmed through federal databases," officials said in a statement.

• The reports will draw on data from sources including the Department of Homeland Security's Systematic Alien Verification for Entitlements (SAVE) program.
• HHS emphasized that states are responsible for reviewing cases, verifying the immigration status of individuals on the CMS reports, and "taking appropriate actions."
• All states will receive these reports within the next month, per the HHS.

Reality check: Medicaid coverage is not available to undocumented immigrants.

• But the change puts the burden of proof on the individuals whose immigration statuses the CMS cannot verify through the databases.

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The FDA warned yesterday against eating certain brands of shrimp because they might be radioactive.

Why it matters: Prolonged exposure to radiation could cause sickness or even death.

Driving the news: The FDA said certain types of Great Value raw frozen shrimp sold at Walmart may be contaminated with the radioactive isotope Cesium-137.

• U.S. Customs and Border Protection initially told the FDA that Cesium-137 had been detected in containers at four different U.S. ports, the FDA said.
• The FDA then found the isotope in one sample of breaded shrimp.
• Indonesia's BMS Foods allegedly violated the Federal Food, Drug, and Cosmetic Act, the FDA said, because the product "appears to have been prepared, packed, or held under insanitary conditions whereby it may have become contaminated with Cs-137 and may pose a safety concern."

Yes, but: No shrimp that tested positive has entered the U.S. commerce supply, according to the FDA.

• All products from BMS are banned "from coming into the U.S. until the firm has resolved the conditions that gave rise to the appearance of the violation," the FDA said.

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🐘 Republicans have their story about the health care cuts in the tax-and-spending law, and they're sticking to it as they face constituent anger during the congressional recess. (Modern Healthcare)

🦟 The debilitating virus chikungunya is surging globally as mosquitoes move with the warming climate. (NYT)

⚖️ A federal judge struck down a lawsuit from Elevance Health that argued the government unfairly lowered its Medicare Advantage quality ratings — a decision that could cost the insurer $375 million. (Stat)

💊 Shares of Viking Therapeutics plunged after trial data on an experimental obesity pill disappointed Wall Street. (CNBC)