U.S. Healthcare Costs Projected to Rise 8.2% in 2027

Mercer projects that healthcare costs per employee will increase by 8.2% in 2027, marking the steepest rise since 2003 and the fifth consecutive year of growth. The projection follows a survey of 1,800 U.S. employers and identifies several primary drivers for the spike, including hospital consolidation, reduced government spending, AI-enabled medical billing, and the high cost of new treatments such as GLP-1 weight-loss drugs.

To offset these expenses, two-thirds of companies with 500 or more employees plan to raise premiums. Additionally, nearly half of these organizations intend to increase deductibles and copays for their staff. These measures are expected to reduce workers' take-home pay and may limit overall wage growth as health insurance consumes a larger share of total compensation packages.

Supporting data from the Bureau of Labor Statistics shows that private employers currently pay an average of $3.48 per hour for employee health insurance. The Congressional Budget Office further projects that insurance costs will continue to outpace wages over the next 30 years, treating health insurance as a substitute for cash wages.