Employers brace for another year of healthcare cost increases

Employers anticipate healthcare costs to rise once more in 2027, with Aon projecting a 9.5% increase, marking the fourth consecutive year of double-digit cost hikes. This projection would push average costs surpassing $19,000 per employee. Employers are currently absorbing 82% of these expenses. The cost per employee for 2026 is estimated at $17,562, marking an 8.3% rise from the previous year.

Employers shell out $14,432, which is expected to increase by 8.8% compared to 2025. However, employee cost sharing is also on the rise, with an average of $5,297 projected for 2026, a 7.9% increase from 2025. The biggest jump comes from out-of-pocket expenses, which are anticipated to surge by 10.2% to $2,167. Mike Pasterick, Aon's North America Health Solutions Leader, stated that at this level, rising healthcare costs become more than just a budgeting issue, affecting decisions on benefits strategy, employee affordability, and overall workforce and financial planning.

A similar WTW survey indicates employers foresee a 11.1% increase in healthcare costs next year, calling it the highest spike in health insurance costs in nearly two decades. Jeff Levin-Scherz, WTW's population health leader, expressed concern, saying employers are telling them it's unsustainable.