The 2027 Healthcare Cost Forecast Employers Can’t Ignore

U.S. employers expect healthcare costs to rise 11.1% in 2027, according to a recent Wall Street Journal article: “U.S. Workers Are Paying More for Healthcare, and Next Year Will Be Worse.” If that projection holds, it would be the steepest increase in more than 20 years.

2027 healthcare cost increases are putting more pressure on benefit budgets, and there is little reason to assume the trend will ease on its own.

So, what does this mean for employers and brokers? It is time to understand what is happening inside the plan before the next renewal number arrives.

Healthcare Costs Are Hitting Strained Budgets

Employers are already balancing higher plan costs against what employees can reasonably afford.

Americans with workplace coverage are expected to spend an average of $5,297 on healthcare through 2026, according to Aon, a global risk management firm and insurance broker.

As Harvard healthcare-policy professor Michael Chernew told The Wall Street Journal, “Healthcare spending recently has risen more quickly than income.”

That gap makes another year of sizable increases harder to absorb, especially as the use of expensive cancer treatments and inclusion of GLP-1’s continues to drive healthcare spending up. “Employers are telling us that this is utterly unsustainable,” said Jeff Levin-Scherz, a population-health leader at WTW.

As employer expenses rise and renewal season nears, many are left with two options: passing more cost to employees or looking more closely at how their plans are performing.

The second option deserves more attention heading into 2027.

Claims Analytics Are the Key

As healthcare costs increase, employers and brokers must be able to see where spend is changing and whether large claims are likely to continue.

Without clear visibility into changing patterns, cost management can become a series of broad decisions made against a single total.

A renewal increase only shows the result, but claims data can help explain what produced it.

Good reporting helps employers and brokers ask useful questions:

• Which claims are having the greatest effect on plan performance?
• Are changes in utilization beginning to create a sustained trend?
• Are there additional solutions or programs to evaluate for the plan?

Answers to these points can help employers distinguish a temporary spike from an issue that may extend into the next plan year.

With 2027 healthcare cost increases approaching double digits, that distinction becomes increasingly important. Employers need to know what they are managing before deciding on the best approach.

Connecting Pharmacy Benefits to Utilization Costs

Prescription costs are also shaping the outlook.

The Wall Street Journal article points to growing use of expensive treatments, including cancer therapies and GLP-1 medications, as a driver of higher healthcare spending.

A total pharmacy number is only one aspect, however, and it’s not enough to base crucial plan decisions on. Employers and brokers need enough visibility to see which medications are driving spend and whether their current PBM arrangement is working in their plan’s favor.

Their plan review can surface questions about specialty medications or how members are accessing high-cost therapies.

The goal is a pharmacy strategy built around what is actually happening in their plans, and any changes should target areas with the most opportunity for cost savings and an improved member experience.

Self-Funding Gives Employers Control Over Their Plans

These rising costs make flexibility more valuable than ever.

Traditional, fully insured plans might absorb some costs on risk and the fixed monthly premiums, but they leave employers with little control over plan design and minimal insight into claims data.

A self-funded strategy gives greater access to plan data and more control over how benefits are built. When the data points to a specific cost driver, employers and brokers have more room to evaluate a specific response instead of working within a fixed carrier structure.

That could mean reconsidering a pharmacy arrangement. It could mean examining how high-dollar claims are managed. In other cases, the answer may be found in the network or payment accuracy parts of a plan.

The response depends on what the data reveals.

That is one of the practical advantages of self-funding. Employers can make decisions based on their own population and performance, while brokers can use those insights to provide more specific guidance.

Target Cost-Containment Prior to Renewal

The 11.1% forecasted increase is a market number, but no individual employer will experience the market in exactly the same way.

One plan may be constrained by specialty pharmacy, while another may face several ongoing high-cost claims. What initially appears to be a broad increase in plan utilization could actually be concentrated in one area.

Before deciding how to respond, employers and brokers need to identify the source by asking, “What is driving our increase?”

Answering that question requires looking beyond the overall rise to understand where costs are concentrated. Employers and brokers can do this by reviewing:

• Claims driving the greatest share of plan spend
• Length of activity for high-cost claims
• Changes in utilization and site of care
• Specialty medication and GLP-1 trends
• PBM contract performance

Together, the findings can show employers and brokers whether the current plan gives them enough information to respond and whether there is room to optimize current cost containment strategies.

Start the 2027 Planning Conversation Now

The Wall Street Journal report described the 2027 outlook as “the biggest health-insurance increase in at least two decades.”

That warning demands attention now.

The most useful response to 2027 healthcare cost increases is gaining a clear, detailed view of plan performance and enough flexibility to act on that information.

For employers already operating a self-funded plan, this is the time to stress-test the strategy. Look closely at claims performance. Dig into pharmacy spend. Ask whether current cost-containment efforts are addressing the areas creating the most pressure.

For employers considering self-funding, the 2027 outlook gives that conversation more weight. Greater visibility and control become far more valuable when the alternative is to simply absorb another increase without justification.

The forecast is here. This is the fifth year of rising costs, projected to be the highest seen in decades, according to the Wall Street Journal report. The more important number, though, is the one inside your own plan. Point C’s solutions are designed around specific plan needs, helping employers and brokers understand what’s driving costs and where there may be opportunities to respond. Our national TPA model combines local market presence with strategies shaped around each unique plan’s performance. Real-time reporting on top of that allows for accurate, usable data that brokers and employers can rely on.