Rising Health Insurance Premiums Strain Small Businesses, Morgan Health CEO Says
As Congress debates healthcare cost legislation, private-sector data points to GLP-1 drug adoption and hospital labor expenses as primary cost drivers affecting small employer coverage markets.
Health insurance premiums for small businesses have risen 20 to 25 percent, according to Dan Mendelson, CEO of Morgan Health, who made the remarks during a June 2026 interview with Bloomberg Television. Mendelson identified three primary cost drivers: expensive new medical technologies including GLP-1 weight-loss and diabetes drugs, rising hospital labor costs, and broader technology adoption across the healthcare delivery system. He noted that labor constitutes approximately 70 percent of hospital operating expenses, according to his remarks as reported by Bloomberg.
The small business impact carries direct federal policy relevance. The Small Business Health Options Program (SHOP), administered by the Centers for Medicare and Medicaid Services (CMS), is the primary federal vehicle through which businesses with fewer than 50 full-time employees access group coverage. Premium trends in the commercial small-group market affect federal subsidy outlays under the Affordable Care Act, which remain subject to ongoing congressional reauthorization debates. CMS publishes annual SHOP premium data, and the most recent actuarial reports would reflect whether the 20-to-25-percent increase cited by Mendelson is consistent with the small-group market broadly.
GLP-1 drugs, including semaglutide-based products marketed as Ozempic and Wegovy by Novo Nordisk, have emerged as a significant line item in employer health plan budgets. According to publicly available pharmacy benefit data published by the Employee Benefit Research Institute (EBRI), GLP-1 prescriptions as a share of employer drug spend increased substantially between 2022 and 2024. Whether small-group plans cover GLP-1s at the same rates as large-group plans is not uniformly tracked by a single federal agency; the Government Accountability Office has been asked by members of Congress to examine this coverage disparity, though a final report has not been publicly released as of the date of this publication.
In Congress, healthcare cost legislation relevant to small businesses includes provisions in the reconciliation package currently under Senate consideration, as well as standalone bills such as the Small Business Health Fairness Act, which has been introduced in multiple sessions. Voting records and bill text are available through Congress.gov. Neither the House Energy and Commerce Committee nor the Senate HELP Committee has scheduled a markup specifically addressing GLP-1 coverage mandates as of June 24, 2026, according to publicly posted committee calendars.
What remains unknown is whether the 20-to-25-percent premium increase figure cited by Mendelson applies to a specific plan year, geographic market, or plan type within the small-group segment. Morgan Health is a subsidiary of JPMorgan Chase focused on employer healthcare strategy; its internal data is proprietary and not subject to public disclosure requirements. The full scope of the cost trend would be answerable through CMS's Medical Loss Ratio annual reports, EBRI's annual health benefits survey, and employer filings under the Employee Retirement Income Security Act (ERISA) as compiled by the Department of Labor.