U.S. Health Insurance Costs Head for Biggest Jump Since 2003

U.S. health insurance costs are heading for their steepest increase in more than two decades, with employers expecting the average cost of providing health benefits to rise 8.2% per employee in 2027. The increase would be the largest since 2003 and could leave many workers paying more through higher paycheck deductions, deductibles, or other out-of-pocket costs.

The projection comes from Marsh’s National Survey of Employer-Sponsored Health Plans, based on preliminary responses from more than 1,800 U.S. employers. Even the 8.2% figure assumes companies take steps to control spending. Employers said the cost of maintaining their current plans without changes would rise by an average of 11%.

That makes the story about more than employer budgets. For millions of households, another sharp increase in healthcare costs could arrive alongside already elevated expenses for housing, food, energy, insurance, and transportation.

Health Costs Have Been Accelerating for Years

The projected 2027 increase follows several years of increasingly expensive employer health plans.

Marsh says 2027 would mark the fifth consecutive year of elevated health-benefit cost growth after roughly a decade of more moderate increases. Employers expected costs to rise 6.7% in 2026, itself the strongest increase in years. The new 8.2% projection suggests that pressure is still building rather than easing.

Those numbers refer to the total cost of employer-sponsored coverage rather than the amount individual workers pay directly. Employers typically cover part of premiums themselves, while employees contribute through payroll deductions and then face deductibles, copays, and other costs when they use healthcare.

The concern for workers is that companies cannot necessarily absorb an 8% or 11% increase without changing something.

Workers Are Likely to Feel the Increase

Marsh says 59% of employers responding to its latest survey plan cost-cutting changes to their health benefits for 2027. Some of those changes could include higher deductibles or other adjustments that increase what employees pay when they receive care.

A separate Mercer survey released earlier this year found that 48% of large U.S. employers expected to make medical-plan changes that would increase workers’ out-of-pocket costs. About two-thirds of large employers also expected to increase employees’ share of premiums in 2027.

That means an 8.2% increase in U.S. health insurance costs does not translate neatly into an 8.2% increase for every employee. Some workers may see smaller changes, while others could face increases above that figure depending on how their employer restructures coverage.

Marsh specifically warns that some employees could see paycheck deductions rise by more than the overall 8.2% average.

What Is Driving the Increase?

Several pressures are pushing healthcare costs higher at the same time.

Marsh points to increasingly expensive diagnostics and treatments, consolidation among hospitals and healthcare providers, and very high-cost therapies for cancer and rare diseases. Prescription drugs remain another major factor.

GLP-1 drugs used for weight management have become particularly significant. Marsh estimates that rising use of the medications accounts for roughly one percentage point of the projected 2027 cost increase. Some employers have already responded by reducing or removing coverage for weight-loss use.

Another less visible factor is technology. Marsh says rapid adoption of AI-assisted medical billing software has contributed to more claims and more claims submitted at higher billing levels.

The company also points to unexpectedly high payments arising from the Independent Dispute Resolution process created under the No Surprises Act. The system settles payment disagreements between insurers and out-of-network healthcare providers, but the volume of disputes and the amounts awarded have exceeded earlier expectations.

None of these pressures looks temporary enough to suggest a quick return to the relatively modest health-benefit increases seen during the previous decade.

Employers Are Looking for Ways to Limit the Damage

Higher deductibles and employee premium contributions are not the only response.

Some employers are introducing plans designed to steer workers toward lower-cost or higher-performing healthcare providers. Marsh says 12% of large employers plan to offer variable copay plans in 2027, rising to 18% among companies with at least 20,000 employees. These plans can reduce costs for workers who use selected providers.

Employers are also paying greater attention to expensive individual claims. New treatments can produce better outcomes, but some come with extremely high prices, creating greater financial volatility for employer plans.

The result could be a more complicated open-enrollment season. Workers may find that familiar plans cost more while employers introduce alternatives with different provider networks, deductibles, and copay structures.

Why This Matters Beyond Healthcare

Healthcare premiums are easy to treat as a separate household expense, but large increases can affect the rest of a family’s finances.

Higher payroll deductions leave less money for food, utilities, debt payments, savings, and emergency expenses. Higher deductibles can also force households to find thousands of dollars at relatively short notice when somebody needs treatment.

That makes rising U.S. health insurance costs relevant to financial preparedness for preppers. Household resilience depends not only on stored supplies but also on maintaining enough financial margin to absorb an unexpected bill or loss of income.

The timing matters because other essential costs are also under pressure. Households facing higher energy, insurance, and healthcare expenses simultaneously have less ability to rebuild an emergency fund or deal with another disruption.

What to Watch During Open Enrollment

The 8.2% figure remains a projection, and Marsh’s final survey results will include responses from more than 2,000 employers later this year. Individual experiences will vary considerably by employer, insurer, location, and plan design.

The clearest indication for workers will come during fall open enrollment, when companies reveal 2027 premiums, deductibles, copays, and coverage changes.

That is when the broader increase in U.S. health insurance costs will turn into specific household numbers.

Bottom Line

Employer-sponsored health coverage is on track for its largest cost increase since 2003, with average costs projected to rise 8.2% per employee in 2027 even after companies take steps to hold spending down.

Workers will not necessarily see their own costs rise by exactly the same amount. But with many employers planning higher employee premium contributions or changes to deductibles and copays, a substantial share of the increase could reach household budgets.

For preppers, the significance is straightforward. Financial resilience can weaken through ordinary recurring expenses just as surely as through a sudden emergency. If healthcare takes a noticeably larger share of income next year, many households will have less room for everything else.