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Employer and worker health plan costs expected to jump in 2027

From CBS News · () English

Summarized by DistantNews. Read the original for the full story.

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  • U.S. employer-sponsored health benefit costs are projected to rise by an average of 8.2% in 2027, the sharpest increase since 2003, according to Marsh.
  • Employers said costs would rise by 11% without measures such as higher deductibles, which can reduce premiums but increase workers’ out-of-pocket expenses.
  • Many employees are expected to face higher paycheck deductions and out-of-pocket costs as employers respond to expensive treatments, provider consolidation and rising prescription drug prices.

U.S. employers are preparing for their steepest increase in health benefit costs in more than two decades. Marsh projects that total health benefit costs per employee will rise by an average of 8.2% in 2027, including contributions from both companies and workers.

That split has been roughly consistent over time, like over a long period of time, over 20 years.

· Matthew RaeKFF’s associate director of the healthcare marketplace described the long-standing division of health plan costs between employers and workers.

The forecast already assumes employers will take steps to control spending. Those measures include raising deductibles, which can lower monthly premiums but leave employees paying more when they receive care. Without such changes, employers surveyed by Marsh said their health plan costs would increase by 11% on average. Fifty-nine percent said they planned to make cost-cutting changes next year.

Health policy researcher KFF says employer-sponsored plan costs have risen sharply over recent decades, largely because treating serious illnesses such as cancer has become more expensive. Marsh also points to a smaller provider base, which gives providers more leverage when negotiating plan prices with insurers.

Historically, when premiums have gone up, workers and employers have sort of shared the burden.

· Matthew RaeRae explained how premium increases have generally been distributed.

Prescription drug costs are adding to the pressure. New treatments, including GLP-1 drugs increasingly used for weight loss, have raised expenses as more companies cover them. Some employers have instead dropped coverage or tightened eligibility rules, Beth Umland, Marsh’s director of employer research for health and benefits, told CBS News.

It is fair to say that most employees will spend more on healthcare next year, with both higher paycheck deductions and higher out-of-pocket costs.

· Beth UmlandThe Marsh executive forecast higher costs for employees in 2027.

Workers typically pay about 20% of health plan costs, while employers cover roughly 80%. Matthew Rae of KFF said that division has remained broadly consistent for about 20 years and that workers and employers have historically shared premium increases. Umland said most employees will likely spend more on health care in 2027 through both larger payroll deductions and higher out-of-pocket costs.

Employers have been trying to avoid shifting health costs to employees in recent years, but after a few years of elevated cost increases, many will feel they have no choice.

· Beth UmlandUmland described why employers may pass more costs to workers.
About this summary

Originally published by CBS News. Summarized and contextualized automatically by DistantNews, with a note on how the source frames the story. Not individually reviewed before publishing. How this works.

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