Employers Anticipate Healthcare Costs to Rise for 5th Consecutive Year

Health benefit costs for employers are estimated to increase 8.2% in 2027, according to Marsh Inc.’s 2026 National Survey of Employer-Sponsored Health Plans. It will be the fifth consecutive year they have risen and the highest annual jump since 2003, when Marsh forecast a 13.9% increase.

Analyzing responses from more than 1,800 U.S. employers, the professional services firm learned that, without cost-reduction measures, employers reported next year’s health benefit costs would jump an average 11%.

Marsh’s average projected increase is greater than last year’s forecast of 6.7% for the 2026 year, and far outpaces the current annual U.S. inflation rate, which is 3.4% for the 12-month period ending this July 31, according to data from the U.S. Bureau of Labor Statistics.

According to Marsh’s survey, the biggest driver of next year’s medical cost increases will be GLP-1 medications for weight management.

“We estimate that rising GLP-1 utilization accounts for a full percentage point of the overall cost growth for 2027,” said Sunit Patel, Marsh’s U.S. chief actuary for health and benefits, in a statement. “While the market for these medications is evolving in ways that could ultimately result in lower costs, some employers needing immediate cost relief chose to drop this coverage for next year.”

Other factors increasing benefit costs include rapid adoption of artificial-intelligence-powered billing software, which has led to more claims being filed for reimbursement; health-system consolidation; and lower government funding and reimbursements in public health programs.

Most surveyed employers (59%) said they are planning cost-reduction efforts to help cut medical benefit costs in 2027, including measures such as raising deductibles.

“Few organizations can absorb health cost increases that outpace inflation without making difficult financial decisions,” said Simon Camaj, Marsh’s U.S. health and benefits leader, in a statement.

The Marsh estimate matches other recent reports that foresee similar increases in next year’s healthcare benefit costs before mitigation efforts, including 9.2%, projected by the Business Group on Health; 9.5% by Aon PLC; 10% by the International Foundation of Employee Benefit Plans; and 11.1% by WTW.

Marsh gathered survey responses from June 10 through August 10.