TUE AM News: M3 Insurance report spotlights rising employer healthcare costs; Developers drop data center portion of Milwaukee redevelopment project

July 7, 2026

— Madison-based M3 Insurance is putting a spotlight on rising healthcare costs for employers, noting its client base saw a 7.46% increase this year.

The insurer recently released the 2026 edition of “Momentum: An M3 Employee Benefits Trend Report.” It shows its clientele of about 2,000 employers across the country are currently spending $17,042 per employee per year on healthcare.

While the year-over-year change is smaller than last year’s average increase of 8.64%, this “meaningful moderation” is well above the rate of inflation and follows years of rising costs, report authors wrote. They note that increase being applied to the larger base spend is “a very different problem” than it would have been just five years ago.

Meanwhile, utilization is on the rise for mental and behavioral health services, treatment of musculoskeletal conditions and chronic conditions, the report shows. But the landscape is dominated by specialty drugs, making up 51.5% of total spending among M3 clients, the report shows.

“For the first time, the majority of what employers are spending on pharmacy is being driven by a relatively small number of high-cost medications,” authors wrote.

Importantly, this category doesn’t include GLP-1 weight loss drugs. Authors note the cost pressure associated with these treatments along with the rising share represented by specialty drugs “are two separate and compounding challenges employers are managing simultaneously.”

Though these drugs offer “genuine clinical benefit” for diabetes and weight management, they’re making up 3-5% of total healthcare spending and up to 20% of prescription drug spending for these employers.

When broken down by size, only the largest employers in the insurer’s client base had an average increase in per-employee spending this year that exceeded last year’s increase. For those with 500 or more employees, the average increase rose to 8.97% this year from 8.91% last year.

For those with between 250 and 499, the increase fell to 6.24% from 8.36%. Among employers with between 100 and 249 employees, the increase fell to 7.76% from 9.52%. And for those with 99 and fewer employees, it fell to 7.35% from 8.42%.

Authors say the overall trend is a “meaningful signal that employer action is having an effect” on their healthcare spend, pointing to some renegotiating pharmacy agreements and adjusting plan designs.

And though the increase seen among M3’s largest clients isn’t much larger than the prior year’s, authors say the trend is “worth watching closely” since it differs from all other groups.

“Large employers often have greater self-funded exposure, more complex plan designs, and higher concentrations of high-cost claimants,” authors wrote, adding “if you’re in this size band, the data is a signal to act with urgency, not wait for the market to stabilize.”

The report notes the impact of “catastrophic” claims exceeding $100,000 on healthcare spending by these large employers, especially around cancer and specialty drugs. For claims in this upper range, cancer is the top condition, representing about 26% of all high-cost claim spending and more than triple the amount of the next-highest category.

Factors driving this trend include more frequent cancer diagnoses, higher treatment costs linked to specialty medications and longer durations of treatment associated with higher survival rates for various forms of the disease.

“That last point is often overlooked,” the authors wrote. “Better outcomes are genuinely good news — but they also mean more months of high-cost treatment per patient.”

See the release.

See the report.

— A Milwaukee alderman says developers have dropped plans for a data center from a proposal to redevelop the site of a former Walmart.

Ald. Mark Chambers yesterday announced Affordable Family Storage had notified him that a “computing research facility” would be removed from the company’s proposal to redevelop the site in Midtown Center, located northwest of downtown Milwaukee.

“By removing the computing research facility, the focus returns to what matters most to our community: transforming a long-vacant property into a destination that delivers housing, a new Milwaukee Public Library branch, neighborhood-serving amenities, and lasting benefits for residents,” Chambers said.

The city’s Plan Commission had placed the proposal on hold late last month after an hourslong meeting where residents railed against the inclusion of the computing facility.

City officials and developers argued the facility does not meet the definition of a data center and noted it would be much smaller than the hyperscale data center campuses being built in Mount Pleasant and Port Washington.

Affordable Family Storage did not immediately return a request for comment.

— Sen. Brad Pfaff is calling for a coordinated nationwide effort to address the domestic outbreak of new world screwworm, warning it could wreak havoc on the livestock industry.

The Onalaska Dem and former state ag secretary sent a letter to USDA Secretary Brooke Rollins noting his concern about the parasite after it was detected in the U.S. early last month.

Since then, at least 32 cases have been detected in animals, including 18 active and 14 inactive cases, according to the latest USDA figures. Most were found in Texas, and no cases have been reported in Wisconsin.

Pfaff says a nationwide effort targeting new world screwworm is necessary, noting ranchers and farmers in the state are already struggling with “damaging tariffs,” expensive input costs and “anticompetitive” market practices that are cutting into their profits.

“Further losses from herd infection or limited trade markets should be mitigated as quickly as possible so as to not cause further harm,” he wrote.

He also called for prevention efforts to be “re-prioritized and adequately funded” arguing against federal divestment in programs targeting animal disease in neighboring countries and domestically. Other Dems have more directly laid the blame on the Trump administration’s cuts to foreign aid programs that played a role in monitoring for new world screwworm abroad.

The new-world screwworm was eradicated in the U.S. nearly 60 years ago, meaning few livestock producers today are largely familiar with how to identify infections. That’s according to an overview from the American Farm Bureau Federation.

While the group notes the heightened concern around the outbreak of the parasite, the group emphasizes that it doesn’t currently threaten the safety of the U.S. food supply.

See the release.

See the letter.

— Wisconsin crop growth last week was accelerated by hot weather, as this summer’s crops are keeping pace with the recent average year.

The USDA’s National Agricultural Statistics Service reports Wisconsin soybeans were 20% blooming as of Sunday, just behind the five-year average of 22%.

The agency’s crop progress report shows oats were 78% headed, compared to the average of 80%. And winter wheat was 74% coloring, near the average of 75%.

Meanwhile, the second cutting of alfalfa hay was 48% finished, one percentage point off the average of 49% for this point in the year.

See the report.

— The USDA is providing $1.125 million to the city of Lancaster in Grant County to renovate a fire and rescue station that also houses emergency medical services.

The project includes heating, cooling and plumbing upgrades for the 30-year-old building, as well as updating its power distribution system and backup power supply. It will also add an elevator, emergency lighting, decontamination laundry and showers, an office area and more.

See more in the release.

— U.S. Sen. Tammy Baldwin is demanding the Trump administration “immediately reverse course” on cutting money for preventing teen pregnancy, including $1.2 million in grant funding in Wisconsin.

The Madison Dem and other Dem senators recently sent a letter to U.S. Department of Health and Human Services Secretary Robert F. Kennedy, Jr., expressing “outrage” over the administration’s move to end most Teen Pregnancy Prevention Program grants.

“We call on you to immediately reinstate funding for these grantees who have a proven track record of working to uphold the goals of the program in accordance with the law,” the lawmakers wrote, noting grantees are currently partway through their funded projects.

Fifty-three of the program’s 66 existing grants were cut, according to the letter. Baldwin’s office says that includes $1.2 million in grant funding in Wisconsin, which aimed to prevent unintended pregnancies and sexually transmitted infections. It also supported health education for teens and communication training for medical providers to help them connect with young people.

The U.S. teen birth rate has been declining for 35 years, including a 7% decline in 2025 alone based on CDC data. The number of babies among mothers aged 15-19 was five times higher in 1991, according to the letter.

“Evidence suggests that these declines are driven by several factors, including the use of more effective forms of contraception, greater access to information about pregnancy prevention, and a decline in teen sexual activity, which the TPP Program has supported,” lawmakers wrote.

See the letter.

See Baldwin’s release.

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