TL/DR –
Employer health benefit costs are projected to rise by 8.2% in 2027, marking the fifth consecutive year of increases, according to a survey from Marsh Inc. The survey identified GLP-1 medications for weight management as a significant driver of cost increases, with other factors including the adoption of AI-powered billing software, health-system consolidation, and decreased government funding for public health programs. To mitigate these increases, 59% of surveyed employers plan to implement cost-reduction strategies.
Projected Increase in Employer Health Benefit Costs
Health benefit costs for employers are projected to rise 8.2% in 2027, according to a national survey by Marsh Inc. This would mark the fifth year of consecutive increases and the largest annual hike since 2003.
Results of Marsh Inc.’s National Survey
Marsh’s survey garnered responses from over 1,800 U.S. employers, revealing an average anticipated increase of 11% in health benefit costs without cost-reduction measures. This projected increase surpasses last year’s forecast of 6.7% and significantly outpaces the current U.S. annual inflation rate of 3.4%.
Key Drivers of Medical Cost Increases
The survey identifies GLP-1 medications for weight management as a primary contributor to the spike in 2027’s medical costs. Other factors include rapid adoption of AI-powered billing software, health-system consolidation, and decreased government funding in public health programs.
Employers’ Cost-Reduction Plans
With a need to alleviate these soaring costs, 59% of surveyed employers are planning cost-cutting measures in 2027. These strategies include increasing deductibles and reconsidering coverage for certain medications.
Comparisons with Other Reports
The Marsh projection aligns with other recent reports predicting similar increases in 2027’s healthcare costs despite mitigation efforts. Other projections range from 9.2% by the Business Group on Health, 9.5% by Aon PLC, 10% by the International Foundation of Employee Benefit Plans, to 11.1% by WTW.
Survey Timeline
Marsh collected survey responses between June 10 and August 10.
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