US employer healthcare cost projections through 2027

United States employer-sponsored healthcare costs are projected to experience significant increases through 2027. For 2026, Mercer projects a 6.7% rise in employer health-benefit costs, the steepest increase in 15 years, which could push average costs above $18,500 per employee. In 2025, the average total cost per employee was $17,496, while average annual premiums for family coverage reached $26,993.

Forecasts for 2027 suggest even sharper escalations. Industry estimates for commercial medical cost trends vary: PwC projects a 9% increase, the highest in 17 years; WTW expects an 11.1% rise; and Aon projects a 9.5% climb. Milliman estimates a median trend of 9.9%. Prescription drug costs may rise by as much as 11.5%, driven by specialty drugs and GLP-1 weight-loss medications. Analysts attribute these trends to structural issues, including a lack of price transparency and the rollout of expensive hospital services.

These rising expenditures are expected to impact employee compensation. Aon data shows 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. Consequently, nearly half of large employers anticipate medical plan changes in 2027 that will increase out-of-pocket costs for workers through higher payroll deductions, increased deductibles, or larger copays.

To manage costs, some experts suggest improving hospital operational efficiency, such as patient flow management, to avoid unnecessary expansions. Meanwhile, lawmakers are considering legislation to mandate greater price transparency from providers to mitigate expenses.