Healthcare costs for U.S. employees are projected to rise nearly 10% in 2027, exceeding $19,000 per worker. This marks the fourth consecutive year of near-double-digit growth, continuing one of the longest stretches of healthcare inflation employers have seen in decades.
While employers cover over 80% of health plan costs, workers will still bear the burden. In 2026, employees are expected to pay an average of $5,297 for coverage—up 7.9% from the previous year. That total includes a 6.4% increase in payroll contributions, bringing the average to $3,130, and a 10.2% rise in out-of-pocket expenses, which will reach $2,167.
Chronic conditions and specialty drugs drive spending
The increase stems from several factors, including a rise in chronic conditions that lead to more high-cost medical claims. Prescription drugs also contribute, particularly as patients increasingly use specialty medications and GLP-1 therapies—weight-loss and diabetes treatments that have gained popularity. Employers now face the challenge of balancing healthcare access with affordability and long-term sustainability.
Out-of-pocket expenses are climbing because of higher healthcare service utilization and enrollment in leaner insurance plans. Some of the rise in medical billing has also been tied to technologies like artificial intelligence, which support more detailed clinical documentation and coding.
For workers, the financial pressure extends beyond premiums. The steady increase in out-of-pocket costs means more spending on deductibles, copays, and coinsurance—expenses that strain budgets when wages don’t keep up. Many families already skip necessary care due to cost, and another year of steep increases could force more people to delay treatments or forgo medications.
Employers face tough trade-offs
Aon’s North America health solutions leader, Mike Pasterick, said the rising costs affect more than just budgets. “At this level, rising health care costs become much more than a budgeting challenge and influence organizational decisions from benefits strategy and employee affordability to broader workforce and financial planning priorities,” he said.
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The data supports this. Healthcare cost increases for employers have more than doubled, rising from 3.7% in 2022 to a projected 8.8% in 2026. Aon’s North America chief actuary of health solutions, Debbie Ashford, said companies that address risks early will fare better. “The organizations best positioned for the future will be those that can identify emerging risks and take targeted action before costs escalate,” she said.
A Mercer survey found nearly half of U.S. employers with 500 or more employees plan to shift more healthcare costs to workers in their 2027 plan offerings. Meanwhile, 83% of employers said the rising costs will require trade-offs with wage and salary increases, according to a survey by the National Alliance of Healthcare Purchaser Coalitions.
The situation affects more than finances. For many workers, the decision between healthcare and other essentials—rent, groceries, childcare—becomes increasingly difficult. With no signs of costs stabilizing, pressure on both employers and employees will likely continue to grow.
The current path is unsustainable. Changes in plan design, cost-sharing, or broader policy shifts will be necessary to address the issue.
Federal agencies recently dropped contractor affirmative action rules, which could further complicate how employers structure benefits and hiring practices in response to rising expenses.
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