In-The-Know
The Generational Cost Shift: Why Your Clients Can’t Afford "Business as Usual"
In this issue
As a benefits consultant, you’re not just seeing costs rise – you’re seeing risk emerge earlier and spend shift within the population. The latest insights from our 2026 White Paper “Managing tomorrow’s cost today” highlight differences across gender and generations that have significant impact on cost and care delivery; baby boomers still drive the largest catastrophic spend, and the fastest spending growth is occurring among Millennials and Gen Z.
To help your clients address the declining health of their populations and rising benefits costs, they should understand the effects of age and gender on their populations’ overall health. Here is a high-level breakdown of some of the generational and gender-based trends shaping the 2026 landscape.
Employees are Getting Sicker Younger
We are seeing an early onset of chronic risk. Conditions once reserved for older populations—obesity, hypertension, and diabetes—are appearing earlier in life, increasing the likelihood of future high-cost events.
- The Millennial Shift: Over a two-year time period, the number of "well" Millennials has dropped from 25% to 22% as they migrate into chronic and complex condition categories.
- The Metabolic Crisis: Nearly one-third of Millennials now have a metabolic condition
- The Utilization Gap: Despite these rising risks, younger employees are the least likely to have a Primary Care Provider (PCP), opting instead for expensive, just-in-time healthcare options - Emergency Room or Urgent Care visits.
The Virtual Care Coordination Gap
Virtual care has become a core feature of many benefit plan designs, but the white paper shows virtual care users lack an established primary care physician (PCP) relationship. When employees use virtual care without a PCP relationship, their per-member-per-per-month costs are consistently higher than employees in a PCP-led coordinated care model.
The reason for the higher PMPM costs is these employees have lower clinical compliance so downstream costs inevitably rise. The takeaway for brokers and plan sponsors? Virtual care is most effective as a bridge to primary care, not a replacement for it.
The Gender Divide in Catastrophic Claims
Men generally have lower PCP engagement than women from early adulthood through midlife, and the data shows how that pattern can translate into higher catastrophic cost and volume later.
- The Price of Delay: This lack of engagement leads to later diagnoses of advanced problems, often leading to catastrophic events that are more expensive to treat. The catastrophic care-related PMPM for men aged 60-64 is 65% higher than those for women.
- The Severity Factor: When catastrophic events (claims over $100k) occur, non-engaged men typically experience higher average costs than women.
Recommendations You can Bring to Your Clients
Here are three strategic pivots to help your clients get ahead of "tomorrow costs”:
| Strategy | Action Item |
|---|---|
| Prioritize the PCP | Position primary care as the foundation of benefit design with simplified access to encourage sustained engagement over episodic use. |
| Target Metabolic Health | Focus on nutrition and activity programs, as metabolic health is one of the strongest levers for reducing long-term catastrophic risk. |
| Segment Communications by Generation | Tailor communications to the preferences of each generation. While the goal - engagement and prevention - remains the same, the tone and channels vary to reach the different generations effectively. |
The Bottom Line
Healthcare costs are being shaped by chronic diseases appearing earlier and catastrophic events becoming more severe later. Employers that intervene now by aligning benefit plan design with these generational patterns are better positioned to slow “tomorrow’s costs”.
Take Action
Our white paper is available here. Please contact Jennifer Lahtinen [email protected] with questions.
Email Jennifer Lahtinen