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New Research: How Rising Costs and Regulatory Pressures Are Reshaping Health Plan Priorities

Author HealthEdge

Rising costs. Relentless regulation. For health plans, the question isn’t whether these pressures are intensifying. It’s how to respond. According to new research from HealthEdge®, these twin forces are now driving some of the most difficult decisions health plan leaders have had to make in years.

Inside the Shift: Health Plans Are Rebalancing

The 2026 HealthEdge Annual Payer Report, The Great Rebalancing, reveals a health plan industry at an inflection point. Cost containment remains the top challenge for the second year in a row, but it’s now joined by a surge in regulatory demands—amplified by new legislation like the One Big Beautiful Bill Act (OBBBA) and shifting interoperability mandates.

The result? A landscape where strategic tradeoffs are unavoidable.

“Health plans are being forced to make deliberate, and often difficult, decisions about where to invest limited resources, choosing between modernization and stability, innovation and affordability, automation and the human touch.”

— The Great Rebalancing: Inside the New Realities Shaping Health Plan Performance 

Regulation: No Longer a Background Risk

According to the HealthEdge report, today’s compliance environment is unlike anything health plans have faced before.

  • 85% of health plan leaders report that regulatory pressures are moderately or significantly impacting their costs and margins.
  • The OBBBA introduces complex real-time eligibility rules and demands tighter oversight of enrollment processes, shifting long-held workflows practically overnight.
  • Interoperability mandates tied to The Centers for Medicare and Medicaid Services (CMS) Final Rules require seamless, real-time data sharing between systems and stakeholders, or risk penalties and non-compliance.

Together, these changes have made regulatory readiness not just a legal necessity, but a core operational challenge.

Cost Containment: Still the Top Priority

At the same time, the cost curve continues to bend in the wrong direction.

Health plans are contending with shrinking margins, rising administrative costs, and ongoing pressure from stakeholders to deliver more value with fewer resources. According to CMS projections, healthcare spending in the U.S. is expected to exceed $7.7 trillion by 2032, far outpacing wage growth and inflation.

Internally, health plans report being squeezed on all sides:

  • Providers are dealing with tighter reimbursement models and administrative burdens.
  • Members are feeling the weight of higher out-of-pocket costs.
  • Operations teams are battling outdated, siloed systems that drive up rework, delay decisions, and hinder scale.

In this climate, cost and compliance are no longer separate challenges. They are deeply interconnected and must be addressed.

What This Means for Health Plan Strategies in 2026

This year’s survey data makes one thing clear: health plans can’t do everything. Instead, they must rebalance priorities, shifting resources toward the capabilities that will yield the greatest impact in an era of mounting complexity.

That’s why many health plans are beginning to:

  • Reevaluate legacy systems and workflows that drive hidden costs.
  • Prioritize investments that enable real-time data sharing and operational visibility.
  • Seek scalable operating models that can flex with regulatory change and business growth.

Finding Balance in the Storm

While there’s no one-size-fits-all solution, the next phase of evolution will depend on how well health plans align people, processes, and technology to respond to change without compromising compliance, service, or financial performance.

As The Great Rebalancing report notes, many health plans are rethinking long-held assumptions. Instead of layering new tools on top of legacy systems, leaders are focusing on connecting the capabilities that matter to unify data, streamline workflows, and enable smarter decisions in less time.

This is where technology modernization and new operating models like Business Process as a Service (BPaaS) can play a role—not simply as cost-cutting measures, but as strategic levers for agility, accuracy, and scalability. The goal isn’t to chase every innovation but to build the right foundation that enables health plans to respond faster to regulatory change, scale efficiently, and deliver the transparency members and providers expect.

Gain insights into what more than 550 health plan leaders are thinking and doing to rebalance their priorities in 2026 by downloading the full report or visiting www.healthedge.com.