US Employers Brace for Biggest Healthcare Cost Increase in More Than 20 Years

WASHINGTON,  — US employers are expecting employee healthcare costs to rise sharply in 2027, with projected increases reaching their highest level in more than two decades as medical prices, healthcare utilization, cancer treatment costs and demand for GLP-1 drugs continue to climb.

Citing a survey by benefits consulting firm WTW, The Wall Street Journal reported that US employers expect healthcare costs for their employees to increase by 11.1% in 2027, marking the largest projected increase in more than 20 years.

The increase would also represent the fifth consecutive year in which employer health-plan costs have risen at an accelerating rate, adding further pressure to companies already facing higher expenses for providing healthcare benefits to their workforces.

Employees are also expected to feel the impact, with their share of healthcare costs rising at a similar pace, including through larger payroll deductions for health insurance premiums.

Employees Face Higher Out-of-Pocket Healthcare Costs

Estimates from employee benefits consulting firm Aon indicate that Americans covered by employer-sponsored health insurance are expected to spend an average of $5,297 on healthcare in 2026.

That represents an increase of $388 from 2025.

The figure includes employees’ contributions toward health insurance premiums deducted from their paychecks as well as out-of-pocket expenses such as deductibles, coinsurance and copayments.

The rising burden highlights how healthcare cost inflation is affecting both employers and workers. While companies typically pay a substantial portion of employee health insurance costs, workers can also face higher expenses as employers adjust premiums and benefit structures in response to increasing medical costs.

Medical Prices and Healthcare Utilization Drive Costs Higher

Several factors are contributing to the continued rise in healthcare spending.

Higher prices for medical treatment and increased utilization of healthcare services are among the major drivers. Employers and insurers are also facing growing costs associated with increasingly sophisticated and expensive treatments for serious illnesses, including cancer.

Advances in medical technology and pharmaceuticals have expanded treatment possibilities for patients, but some of these therapies come with significant costs that can place additional pressure on employer-sponsored health plans.

GLP-1 Drugs Add to Employer Healthcare Spending

The growing use of GLP-1 medications is another factor contributing to higher healthcare expenditures.

Originally developed primarily for the treatment of type 2 diabetes, GLP-1 drugs have gained widespread attention for their effectiveness in weight management. Demand for the medications has expanded rapidly as more patients seek treatment for obesity and related metabolic conditions.

While these drugs may offer important health benefits for appropriately selected patients, their relatively high cost and growing utilization can have a significant financial impact on health plans, particularly when coverage extends to large employee populations.

Employers and insurers are consequently examining how to balance access to these medications with the long-term sustainability of healthcare benefits.

Rising Healthcare Costs Put Pressure on Employers and Workers

Employer-sponsored health insurance remains a central component of healthcare coverage for millions of Americans, making continued increases in medical spending an important issue for both businesses and households.

For employers, rising costs may require difficult decisions over how health benefits are structured, how much companies contribute toward premiums and how much of the financial burden is shared with employees.

For workers, higher premiums and out-of-pocket expenses can reduce take-home pay and increase household healthcare spending.

With healthcare costs projected to accelerate again in 2027, US employers are facing mounting pressure to manage medical spending while maintaining competitive employee benefits and access to healthcare.

 

Source : Xinhua Thai News