You’re going to pay more for health insurance in 2027 as employers see costs jumping for the fifth straight year

In 2027, employers are anticipating a significant increase in health insurance costs, potentially surpassing inflation and taxes in their impact on employees' paychecks. Over 165 million Americans currently benefit from employer-sponsored healthcare coverage, but the rising expenses for employers have led to an 8.2% increase in healthcare costs per employee for 2027, the highest rise since 2003 and the fifth consecutive year of high costs.

Of the 1,800 U.S. employers surveyed by Mercer, a global consulting firm specializing in health benefits, two-thirds plan to raise premiums, leading to even steeper increases in paycheck deductions. Health insurance constitutes approximately 24% of the benefits employers provide workers per hour, with private employers spending an average of $3.48 per hour on employee health insurance out of the $14.07 per hour spent on benefits.

Several factors contribute to the 8.2% increase, including hospital consolidation, reduced government spending on healthcare, and expensive new treatments such as cancer therapies and GLP-1 weight-loss drugs. Mercer's chief actuary estimates that GLP-1 usage alone accounts for one percentage point of the total increase in health cost growth for 2027.

Higher health insurance costs for employers translate into increased out-of-pocket expenses for employees in various ways, such as higher premium contributions, increased deductibles, and copays. Around half of the companies survey by Mercer intend to modify existing medical plans, raising costs for employees. Economists warn that higher healthcare premiums could result in smaller wages, as health insurance is part of workers' total compensation.

The Congressional Budget Office treats employers' contributions to healthcare as a "substitute for cash wages" that contributes to households' economic resources.