US healthcare costs projected to rise sharply through 2027

United States employer-sponsored healthcare costs are projected to rise significantly through 2027, marking some of the highest annual increases in nearly two decades. Multiple industry forecasts indicate that rising premiums and out-of-pocket expenses are beginning to impact total employee compensation.

Key projections include a 9% commercial medical cost trend for 2027 from PwC, the highest in 17 years, and an 11.1% increase expected by WTW. Milliman estimates that the median medical plan cost trend for 2027 could reach 9.9%, while prescription drug costs specifically may rise by as much as 11.5%. These increases are largely driven by outpatient services and pharmacy spending, particularly the expanded use of GLP-1 weight-loss medications and rising specialty drug costs.

As employers face these rising expenses, employees are expected to bear the burden through higher payroll deductions, increased deductibles, larger copays, or slower wage growth. Aon data shows that employees with workplace insurance are already paying an average of $5,297 in 2026 for premiums and out-of-pocket costs, an increase of $388 from the previous year.