The Next Evolution of Employer Health Plans

J Clin Pathways. 2026;12(4-5):e005.

Previous Transformative Business Trends columns have explored how various commercial insurance trends along with employer sponsored plan efforts are empowering and shifting the use of pathways, guidelines, and resulting care outcomes. Affordability (cost), access, and outcomes (quality) remain pillars in care or cost modeling along with health policy considerations.

Today’s health care industry market is undergoing lasting structural change. However, clinical and financial outcomes optimization remains in the public eye as health care benefits are among the costliest expense for households. Against this backdrop, artificial intelligence (AI) is increasingly being used as a tool to identify, analyze, and manage clinical or economic risk.

Planning for the 2027 plan year is well underway or near completion, with commercial health plans increasingly exploring how AI, real-time analytics, and more adaptive clinical pathways can improve risk management, streamline utilization management, and support personalized care.

The 2026 Milliman Medical Index (MMI) estimated that between 2025 and 2026, employer health costs jumped 7.9%. Excluding pandemic-era market fluctuations, this increase marks the sharpest annual increase in more than a decade. Late 2025 estimates on total annual costs, which led business decision makers to prioritize optimizing operations and improving worker productivity, have been restated since last year to an increase of 7.2%. More than two-thirds of that cost growth were driven by outpatient services and prescription drug claims, particularly for GLP-1 medications for diabetes and weight management.¹

As noted in the previous Transformative Business Trends column, employer plans in 2026 were predicted to be more proactive, leading to modeling scenarios, accountability, and a focus on outcomes to successfully support their workforce while controlling costs.² The MMI indicates that employer plans are absorbing a shrinking share of the total claim cost. The MMI data also show the employer risk for health care costs has declined from 61% to 58% over the past 20 years. At the same time, employee (member) costs increased from 21% to 27%. This trend doesn’t look to be slowing and could increase faster in some industries.¹

Improving Access Through Smarter Authorization

Commercial insured plans—whether employer sponsored or fully funded— have already made intra-year changes toward managing the latest cost trends while balancing the concerns of treatment delays by eliminating or simplifying nonmeaningful prior approval programs. The goal is to eliminate the number of authorization requirements that are needed, raising the bar for transparency and accountability and thereby improving access for patients.³  Further refinements to authorization requirements and claim cost controls are anticipated during the 2027 plan year.

AI Expands Personalized Care Opportunities

Broader and faster data handling with real-time analytics has long been a goal for many stakeholders in the health care industry. Increasing the use of AI along with risk outcome alignment can assist key stakeholders in improving plan performance, driving optimal outcomes for all. The trend of personalized care is not only linked to authorizations, but also to care pathways or guidelines (pathways). Applying AI as a mechanism to align personalized care to use authorization is complex. However, it can be an opportunity for pathways to achieve the desired goal of reaching populations that need personalized care such as those with rare disease.

Modernizing Clinical Pathways

For the clinical pathways community, one of the greatest challenges is to apply pathways to meet multiple clinical and payer needs, all of which have impacts on patients who are members in a health plan. AI technology can uncover new treatment insights or larger real-world data sets that may not be found in clinical trials, pathways based on clinical trials, or research guidelines that would have to be open for rapid cycle updates and real-world adjustments in commercial applications. Developers and users of such new pathways can help improve precision medicine, which is expected  to ramp up in 2027 through 2030 and into the next decade.

The confluence of current market trends—such as ever-increasing claim costs, the spike in use of AI, pressures to manage risk, and emphasis on optimizing outcomes in clinical and economic domains—is impacting health care in the US.  As a result, employers will likely rely more on clinical pathways, leveraging AI to include real-time applications and integrate clinical pathways into plan coverage options at the point of service.

As benefit planning for 2027 is underway, nearly completed, or under active final negotiations, the 2026 MMI data underscore the hard reality that current cost trends are unsustainable. Employers and other purchasers of care will seek solutions to better manage, stabilize, or reduce those economic risks. Like we’ve seen with the rapid expansion of virtual care, we can expect AI-aided innovation to drive more rapid, sustainable change across US health care, including in commercial and government plans. Such change is more likely to be beneficial for plan sponsors while optimizing affordable, evidence-based, accessible care across the US population.

1. Bell D, Clarkson J, Jensen, et al. 2026 Milliman Medical Index. Milliman. May 20, 2026. Accessed June 9, 2026. https://www.milliman.com/en/insight/2026-milliman-medical-index

2. Vogenberg FR. Clinical pathways at the crossroads of AI and value-based care. J Clin Pathways. 2026;12(3):e004

3. UnitedHealthcare cuts prior authorization requirements by 30%. UnitedHealthcare. May 5, 2026. Accessed June 1, 2026. https://www.uhc.com/news-articles/newsroom/prior-authorization-reform