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Health care inflation rises as patients, employers brace for biggest jump in health spending in 15 years

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Health care inflation rises as patients, employers brace for biggest jump in health spending in 15 years


Jose Luis Pelaez Inc | Digitalvision | Getty Images

Health-care inflation is fueling higher coverage costs, setting the stage for what could be the largest increase in health-care spending by large employers in 15 years.

Medical care costs in August rose 4.2% on an annualized basis, according to the Labor Department’s Consumer Price Index, compared to an overall inflation rate of 2.9%. The cost of doctors’ visits climbed 3.5%, while hospital and outpatient services jumped 5.3%.

Those price increases are contributing to higher health insurance costs for 2026. Consumers who don’t qualify for government subsidies to buy health coverage on the Affordable Care Act exchanges could face double-digit premium increases for next year, according to early filings from insurers.

Workers with employer health coverage could also have to pay higher premium and out-of-pocket costs next year.

Large employers are projecting their overall health coverage costs will rise an average of 9% in 2026, according to several business group surveys, which would be the highest level of health-care inflation since 2010.

More than half of companies surveyed by benefits consulting firm Mercer earlier this year said they are considering passing on some of those increases to workers, but the Business Group on Health says most large employers in its survey are looking for other ways to cut costs.

“Employers have shied away in every way possible, from passing on costs to employees. This year, we see the first indication that they may look to pass some of that on to employees, but again, only as a last resort. They’re going to try and pull as many other levers as possible,” said Ellen Kelsay, BGH president and CEO.

Employer cost drivers: cancer drugs and GLP-1s

Shana Novak | Stone | Getty Images

Prescription drug prices rose 0.9% in August, according to the Consumer Price Index, which considers a range of widely-used generic and brand-name drugs.

But for large employers, expensive drugs are the major drivers of higher health spending.  

Companies surveyed by BGH are projecting a 12% increase in pharmaceutical costs next year, on top of an 11% hike this year fueled by cancer drugs and diabetes and obesity treatments like Novo Nordisk’s Wegovy and Ely Lilly’s Zepbound.

“Cancers have been for the fourth year in a row, the top condition driving healthcare costs — cancers at younger ages, later stage diagnoses,” said Kelsay, who added that pricy weight loss drugs are are a close second.

“When it comes to the treatment of obesity, that has been the space that has been the most frothy for the past two to three years and has been what has fueled a lot of this pharmaceutical spending,” she said.

Nearly two-thirds of employers with 20,000 workers or more offer access to weight loss drugs known as GLP-1s, according to Mercer. Less than half of small employers surveyed plan to offer access in 2026.  

With growing demand for the drugs, more companies are tightening eligibility requirements and beginning to explore more affordable ways to provide access for their employees, including the cash-pay market.

Cash-pay GLP-1s

A telehealth executive whose firm offers compounded GLP-1s told CNBC that some large employers are quietly letting workers know they can use health savings accounts to buy the medications for less in the cash market.

“They are worried about how much [the drugs] cost, but that doesn’t mean they don’t think their employees shouldn’t have access to them. They just don’t want to have to pay for it,” said the executive, who spoke on condition of anonymity because of the confidential nature of the discussions.

Health account data shows more workers are turning to direct-to-consumer options, including Eli Lilly’s Lilly Direct and Novo Nordisk’s Novocare online pharmacies, both of which offer their weight loss drugs at roughly half the list prices of more than $1000.

GLP-1 purchases are now the top category of cash-pay spending in pre-tax flexible spending and health savings accounts, for expenses not covered by insurance, according to the CEO of health payments processor Paytient.

“We see a tripling from last year to this year of usage at GLP-1 oriented providers. These are places like Lilly Direct, like Ro, like Hims & Hers, and that’s a growing segment,” said Paytient founder and CEO Brian Whorley.  

But employers worry that the cash-pay trend leaves lower-income workers out of the equation because they can’t afford the out-of-pocket costs. That is prompting discussions about how their companies can obtain cash-pay prices to help boost more equitable access for employees.

Self-insured employers have contracted directly with so-called Centers of Excellence for specialty medical care such as cancer treatment and joint replacements. But they can’t currently do the same for many drugs. Under agreements with pharmacy benefit management firms, or PBMs, both the drugmakers and employers would violate their contracts by using a direct cash-pay process. 

But employers are increasingly pressing PBMs for better options, says BGH’s Kelsay. They are beginning to consider new types of benefit managers, which are proposing new payment models for drugs in the development pipeline.

“There are some new entities — some startups in this space — that are building out products and solutions where they are going on behalf of a pooled group of employers to negotiate with manufacturers on certain cell and gene therapies,” she said. 

Paytient’s Whorley calls the challenge of making GLP-1s more affordable a stress test moment for employers and PBMs.

“They’re at a perfect sort of Venn Diagram of clinically effective drugs that change people’s lives, that increasingly will force a choice,” when it comes to financing, Whorley said. “If we get this right, it can provide a blueprint for all the drugs like GLP-1s that will … present challenges for health plans.”



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FAA announces flight reductions at 40 airports. Here’s where cuts are expected and what travelers need to know

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FAA announces flight reductions at 40 airports. Here’s where cuts are expected and what travelers need to know


A Republic Airways plane takes off near the air traffic control tower at Ronald Reagan Washington National Airport (DCA) in Arlington, Virginia, US, on Tuesday, Oct. 28, 2025.

Samuel Corum | Bloomberg | Getty Images

Airlines rushed to provide travelers updates this week after the Federal Aviation Administration said it would reduce flights across 40 airports as the longest government shutdown in history continues to drag on.

Many major airlines said they would waive cancellation fees for even their most basic tickets, which often come with penalties for changes.

Transportation Secretary Sean Duffy previously said he would reduce flight capacity by roughly 10%, affecting 3,500 to 4,000 flights daily.

On Thursday, the FAA formalized a list of affected airports and clarified the reductions would begin at 4% and slowly ramp up to 10% by Nov. 14. The reductions began Friday morning with more than 700 flight cancellations.

These are the airports that are expected to be impacted, including some of the country’s largest airports and major international hubs in Atlanta, Chicago, Dallas, Los Angeles and New York City.

Impacted airports:

  1. ANC – Anchorage International
  2. ATL – Hartsfield-Jackson Atlanta International
  3. BOS – Boston Logan International
  4. BWI – Baltimore/Washington International
  5. CLT – Charlotte Douglas International
  6. CVG – Cincinnati/Northern Kentucky International
  7. DAL – Dallas Love
  8. DCA – Ronald Reagan Washington National
  9. DEN – Denver International
  10. DFW – Dallas/Fort Worth International
  11. DTW – Detroit Metropolitan Wayne County
  12. EWR – Newark Liberty International
  13. FLL – Fort Lauderdale/Hollywood International
  14. HNL – Honolulu International
  15. HOU – Houston Hobby
  16. IAD – Washington Dulles International
  17. IAH – George Bush Houston Intercontinental
  18. IND – Indianapolis International
  19. JFK – New York John F. Kennedy International
  20. LAS – Las Vegas McCarran International
  21. LAX – Los Angeles International
  22. LGA – New York LaGuardia
  23. MCO – Orlando International
  24. MDW – Chicago Midway
  25. MEM – Memphis International
  26. MIA – Miami International
  27. MSP – Minneapolis/St. Paul International
  28. OAK – Oakland International
  29. ONT – Ontario International
  30. ORD – Chicago O’Hare International
  31. PDX – Portland International
  32. PHL – Philadelphia International
  33. PHX – Phoenix Sky Harbor International
  34. SAN – San Diego International
  35. SDF – Louisville International
  36. SEA – Seattle/Tacoma International
  37. SFO – San Francisco International
  38. SLC – Salt Lake City International
  39. TEB – Teterboro
  40. TPA – Tampa International

(The airport in Las Vegas was renamed the Harry Reid International Airport in 2021.)

On Wednesday, Duffy said the reduction was a “proactive” measure because of the delays and cancellations already occurring due to the shutdown. Air traffic controllers, who are considered essential employees required to work during a shutdown, have missed paychecks, and the FAA has said the closure has also raised concerns about already thin staffing among controllers.

Duffy said he expects more cancellations as a result of the reduction, which has no set end time.

“We thought 10% was the right number based on the pressure we were seeing,” Duffy added.

Earlier this week, Duffy told CNBC’s “Squawk Box” that he could “shut the whole airspace down” if the shutdown drags on.

FAA Administrator Bryan Bedford said Wednesday that additional measures may be implemented after the reduction, which he said he has never seen before in his time in the industry. The officials said they were planning to meet with airlines to discuss which flights would be cut.

Airline response

In a Wednesday memo to United Airlines employees, CEO Scott Kirby said the carrier will not be reducing long-haul international flying and hub-to-hub flying, instead reducing regional and domestic flights that do not fly between hubs.

The airline also offered all customers refunds even if their flights are not impacted. Kirby said that included “non-refundable tickets and those customers with basic economy tickets.”

On Thursday afternoon, the airline preemptively said it was going to cancel 4% of its flights from Friday through Sunday.

In a statement, Delta Air Lines said it expects to operate the “vast majority” of its flights as scheduled and will offer changes, cancellations or refunds for customers’ flights during the impacted period. Delta also said that would include basic economy fares, without penalty.

The airline added on Thursday afternoon that it will cancel flights a day in advance to allow customers enough time.

Frontier Airlines CEO Barry Biffle said he highly recommends travelers flying Friday or in the next 10 days book a backup ticket on another carrier as the flight reductions begin to avoid getting stranded due to cancellations.

“I’m sorry this is happening. Hopefully the shutdown is over soon,” Biffle wrote on LinkedIn. “Just giving everyone practical travel advice.”

American Airlines said it expects that the “vast majority of customers’ travel will proceed as planned,” adding that the carrier will reach out to travelers proactively as schedule changes occur.

The airline also said that it will offer immediate rebooking options for all impacted travelers and that customers whose flights are canceled for any reason will be able to change their flight or request a refund without penalty. As of Thursday morning, the airline was still awaiting clarifying information from the FAA about which of its flights will be impacted.

Southwest Airlines also released a statement saying that the majority of its flights will not be impacted and that its international flights should operate as usual. The airline said it will “proactively communicate well in advance and will offer flexibility in travel plans.”

The Association of Flight Attendants, representing 55,000 flight attendants at 20 airlines, released a statement Wednesday urging Congress to end the shutdown so air traffic controllers and Transportation Security Administration workers can get paid.

“The false narrative that this shutdown is a choice of either paying federal workers or protecting affordable healthcare is outrageous when both crises were manufactured by the exact people who can fix it,” the statement read.

What travelers need to know

Passengers check in at an American Airlines’ counter at Ronald Reagan Washington National Airport in Arlington, Virginia, the United States, on Oct. 10, 2025.

Li Rui | Xinhua News Agency | Getty Images

Experts recommend consumers who are set to travel in the next week stay on top of flight cancellations and delays through the websites and apps.

Nick Ewen, senior editorial director at travel site The Points Guy, said flexibility “is going to be key” as travelers rush to rebook, adding it’s important to download each airline’s mobile app and enable all notifications.

“A lot of the times, you have to actually enable notifications on individual trips or in your account to text you if there are changes or disruptions,” Ewen told CNBC.

He recommended anyone with nonurgent travel reschedule their trips, though that likely only applies to a small number of travelers, and consider choosing other forms of transportation instead. For essential trips, Ewen said passengers should be prepared for long wait times, use self-service rebooking tools, and be aware of the fact that many other people will also be rebooking and scrambling for limited seats.

Ewen said he has been covering the industry for many years, and the last time he and his colleagues saw a major, national disruption in air travel like this was 9/11.

“The biggest thing is a lot of kindness goes a long way,” he said. “So if you’re at an airport and you find out that your flight is canceled, I promise you screaming at that airline employee is not going to get you rebooked any faster — in fact, it’s probably going to make them less likely to be willing to help you. So recognize that everyone is in this together.”

AAA spokesperson Aixa Diaz said the company recommends arriving at the airport extra early to avoid long lines and avoid checking in a bag if possible in case flights get canceled.

“Ultimately, there’s a lot that’s out of travelers’ control — so control what you can, and be as flexible as possible,” Diaz said.

How the government shutdown will affect your air travel plans

Travel insurance

Travel insurance can reimburse consumers for certain costs and inconveniences incurred from a trip disruption, like flight cancellations, delays, lost luggage, or unforeseen costs for lodging and meals.

Consumers have been buying travel insurance at an elevated rate amid the government shutdown, but travel and insurance experts warn that such policies don’t offer blanket protection for shutdown-related travel snafus, and a lot depends on the fine print.

For example, a policyholder generally can’t get insurance benefits if they choose to cancel their travel plans to avoid any headaches. Cancel-for-any-reason coverage is an exception, though it also comes with its own caveats.

Whether or not a policyholder gets compensated may come down to the rationale an airline provides for a delayed or canceled flight.

Many insurers only pay benefits if a delay or cancellation is attributable to a “common carrier” disruption like a mechanical failure, travel experts said.

“Airlines typically won’t cite causes other than operational terms like ‘mechanical issues’ or general delays, cancellations, or lost belongings, even during a government shutdown,” Lauren McCormick, a spokesperson for Squaremouth, an online platform for comparing travel insurance policies, wrote in a recent blog post. “So, these are generally still covered under most comprehensive travel insurance plans.”

— CNBC’s Phil LeBeau contributed to this report.



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Airlines cancel more than 700 U.S. flights as FAA-ordered shutdown cuts begin

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Airlines cancel more than 700 U.S. flights as FAA-ordered shutdown cuts begin


Travelers wait in line at a security checkpoint at O’Hare International Airport in Chicago, Illinois on November 7 2025.

Kamil Krzaczynski | Afp | Getty Images

U.S. airlines started cancelling hundreds of flights on Friday, hours after the Federal Aviation Administration ordered the cuts amid the more-than-monthlong government shutdown.

The cuts were ordered as air traffic controllers have missed their paychecks due to the government shutdown, now the longest in U.S. history. Air traffic control staffing shortages have been disrupting flights at several major U.S. airports, vexing travelers and airline executives alike.

Air traffic controller shortages were delaying flights at several major U.S. airports on Friday, including Newark Liberty International Airport in New Jersey, San Francisco International Airport and Hartsfield-Jackson International Airport in Atlanta.

The sudden flight cuts this week forced airlines to scramble with schedule adjustments and make sure crews are where they need to be despite the last-minute changes.

More than 700 U.S. flights were canceled as of 9 a.m. ET Friday, according to aviation data firm Cirium, about 3% of the total schedule for the day. That scale of disruption is fairly common for routine disruptions like major thunderstorms, but the Department of Transportation warned that cancellations could ramp up.

According to the FAA’s order, the flight cuts will increase to 10% over the next week, beginning with 4% on Friday, 6% by Tuesday, 8% by Thursday and finally 10% on Nov. 14.

Friday’s cancellation levels were the 72nd worst for the U.S. flights market since Jan. 1, 2024, according to Cirium. That period also included a Southwest Christmas meltdown after severe weather and mass delays at Delta Air Lines last summer in the wake of a CrowdStrike tech outage.

The financial impact of the latest disruptions isn’t immediately clear. The cancellations could help lift airlines’ unit revenue with customers competing for fewer seats, “but we also believe the prolonged shutdown and widespread cancelations will impact booking demand in the near term,” Scott Group, an airline analyst at Wolfe Research, wrote in a note Friday.

The cuts come during a generally low-demand period for travel ahead of the Thanksgiving holiday, but it still sent many travelers searching for alternatives. Rental car company Hertz said that reservations over the past two days for one-way rentals spiked more than 20% from the same period last year.

Major network airlines said the disruptions were largely centered on regional flights that fly to smaller cities. United Airlines, for example, said its hub-to-hub flying and its long-haul international flights wouldn’t be canceled because of the order.

American Airlines, for its part, said it was limiting disruptions to customers by avoiding cuts to routes it only flies once or twice a day. Instead, the airline is trimming a few flights a day from high-frequency markets – like reducing daily departures between its hub at Dallas Fort Worth International Airport to Northwest Arkansas National Airport from 10 to eight, and Boston Logan International to Ronald Reagan Washington National from 10 to nine.

The airline canceled 221 flights on Friday, according to CEO Robert Isom, who said the airline is “frustrated” with the reduction.

Isom said on CNBC’s “Squawk Box” that the airline is working to ensure flights to all destinations still remain in place, but that the frequency of those flight paths are decreasing.

“What we’ve done today is we tried to minimize the impact on all of our customers — there’s only 220 flights out of 6,200, flights, and we’ve done it in a way that really impacts our smaller aircraft,” Isom said. “This level of cancellation is going to grow over time, and that’s something that is going to be problematic.”

What passengers need to know

Airlines offered travelers alternative flights and waived change fees for affected customers.

Experts recommend staying on top of changing schedules by checking airline apps and websites, as well as checking the fine print on travel insurance.

AAA spokesperson Aixa Diaz said the company recommends arriving at the airport 2 hours early to avoid long lines and avoid checking in a bag if possible in case flights get canceled, though flexibility will be the most important for all travelers during this period.

Travel insurance experts warn that policies don’t always offer blanket protection for shutdown-related changes, and that refunds can often come down to the specific rationale used by the airline to determine the cause of delay or cancellation.

According to Lauren McCormick, a spokesperson for travel insurance platform Squaremouth, airlines sometimes won’t cite causes other than general delays even during a shutdown, which could make it harder to get a refund.

Here’s where flights are expected to be cut, per the FAA and DOT order:

Impacted airports:

  1. ANC – Anchorage International
  2. ATL – Hartsfield-Jackson Atlanta International
  3. BOS – Boston Logan International
  4. BWI – Baltimore/Washington International
  5. CLT – Charlotte Douglas International
  6. CVG – Cincinnati/Northern Kentucky International
  7. DAL – Dallas Love
  8. DCA – Ronald Reagan Washington National
  9. DEN – Denver International
  10. DFW – Dallas/Fort Worth International
  11. DTW – Detroit Metropolitan Wayne County
  12. EWR – Newark Liberty International
  13. FLL – Fort Lauderdale/Hollywood International
  14. HNL – Honolulu International
  15. HOU – Houston Hobby
  16. IAD – Washington Dulles International
  17. IAH – George Bush Houston Intercontinental
  18. IND – Indianapolis International
  19. JFK – New York John F. Kennedy International
  20. LAS – Las Vegas McCarran International
  21. LAX – Los Angeles International
  22. LGA – New York LaGuardia
  23. MCO – Orlando International
  24. MDW – Chicago Midway
  25. MEM – Memphis International
  26. MIA – Miami International
  27. MSP – Minneapolis/St. Paul International
  28. OAK – Oakland International
  29. ONT – Ontario International
  30. ORD – Chicago O’Hare International
  31. PDX – Portland International
  32. PHL – Philadelphia International
  33. PHX – Phoenix Sky Harbor International
  34. SAN – San Diego International
  35. SDF – Louisville International
  36. SEA – Seattle/Tacoma International
  37. SFO – San Francisco International
  38. SLC – Salt Lake City International
  39. TEB – Teterboro
  40. TPA – Tampa International

(The airport in Las Vegas was renamed the Harry Reid International Airport in 2021.)

— CNBC’s Greg Iacurci contributed to this report.



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‘Unsubstantiated Rumours’: RBI Dismisses Reports Of Selling 35 Tonnes Of Gold

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‘Unsubstantiated Rumours’: RBI Dismisses Reports Of Selling 35 Tonnes Of Gold


New Delhi: The Reserve Bank of India (RBI) on Friday denied social media claims that it sold 35 tonnes of gold from its reserves, calling them “unsubstantiated rumours”. In a post shared by the PIB Fact Check Unit on X, the central bank clarified that no such sale had taken place and urged the public to rely only on official sources for verified information.

The RBI also advised users to refer to its official website for accurate data and updates. “Reserve Bank of India, through PIB Fact Check Unit, has debunked claims that 35 tonnes of gold have been sold by RBI from its reserves. RBI cautions against unsubstantiated rumours on social media. For any information pertaining to RBI, please visit the official website http://rbi.org.in,” the RBI posted on its official X handle.

The clarification comes amid heightened global interest and volatility in the gold market, as several major central banks continue to ramp up their gold purchases. Emerging market economies, in particular, have been increasing their gold holdings to diversify away from the US dollar — a trend that gained momentum after the freezing of Russia’s reserve assets in 2022.

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This strategic accumulation has pushed gold’s share of total global reserves to over 20 per cent, reinforcing its status as a “sanction-proof” store of value. Meanwhile, analysts note that the ongoing rally in gold prices is also linked to what’s known as the “debasement trade” — the idea that political uncertainty could weaken the dollar and fuel inflation, prompting investors to turn to gold as a safe haven.

However, recent market data suggests otherwise, as both the US dollar and Treasury yields have remained stable, contradicting the notion of a weakening currency environment.



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