U.S. employers expect to see a significant jump in health insurance costs next year, according to a new survey by the consulting firm Marsh.
The survey of more than 1,800 companies found that they are penciling in an 8.2% increase in the cost of employer-sponsored health insurance in 2027 compared to this year. That would be the largest single-year increase in average employee health insurance costs in more than two decades.
The increase would be an even larger 11% if employers had failed to take steps such as raising employees’ share of premiums to lower overall costs, the survey said.
Multiple factors in play: Insurance costs have risen faster than inflation for years (with the notable exception of 2022), with the consolidation of hospital and provider networks playing a leading role in the upward pricing pressure. More recently, the widespread use of GLP-1 medications for weight loss has added to the cost increases; analysts at Marsh say the drugs will account for a full percentage point of the cost increase next year.
The use of artificial intelligence is also raising costs, as the technology helps providers find more services to bill for, and at higher prices. Another recent driver is the No Surprises Act, which was intended to protect patients from surprise bills from out-of-network providers, but has in practice benefited providers through its prescribed conflict-resolution program.
The bottom line: Health care costs continue to rise, and it looks like next year will be no exception.