U.S. Employer Health Care Costs Projected to Surge 9.5% in 2027 as Inflation Hits Decadal Highs

U.S. employer health care costs are projected to rise 9.5 per cent in 2027, pushing average costs above 19,000 dollars per employee. The projection marks the fourth consecutive year of elevated health care cost trends approaching double digits, extending one of the most sustained periods of health care inflation employers have faced in decades.

Medical spending continues to rise as utilisation increases, chronic conditions become more prevalent and the number of high-cost claims grows. Prescription drug spending remains a significant contributor, driven by growing use of specialty medications and continued adoption of GLP-1 therapies, which are expanding into cardiovascular disease, sleep apnea and chronic kidney disease as oral formulations broaden access. Aon also notes additional cost pressure emerging as providers adopt technologies including AI that support more detailed clinical documentation and coding, contributing to higher billed charges in some instances.

Mike Pasterick, North America Health Solutions Leader for Aon, said employers have now experienced several consecutive years of increases approaching double digits, and that at this level rising costs become much more than a budgeting challenge, influencing decisions from benefits strategy and employee affordability through to broader workforce and financial planning.

Employer cost rose from 13,269 to 14,432 dollars between 2025 and 2026, an 8.8 per cent increase. During the same period, employee premiums from paychecks rose from 2,943 to 3,130 dollars, up 6.4 per cent. The total plan cost rose from 16,212 to 17,562 dollars, while the employer subsidy moved from 81.8 to 82.2 per cent. Employer cost increases have more than doubled since 2022, rising from 3.7 per cent to 8.8 per cent in 2026.

By industry, projected 2025 to 2026 employer cost increases vary: finance and insurance leads at 9.8 per cent, followed by technology and communications at 9.1 per cent, professional services at 8.7 per cent, and manufacturing at 7.5 per cent. The health care sector itself saw a 6.5 per cent increase.

Debbie Ashford, North America Chief Actuary, Health Solutions for Aon, said the organisations best positioned for the future will be those that can proactively identify emerging risks and take targeted action before costs escalate, adding that employers will need better data and deeper insights to understand where costs are rising.