Healthcare Cost Increases: Rethinking Your 2027 Assumptions

Open enrollment may feel far away. It isn’t. Summer is when benefits planning for 2027 starts taking shape.

Health benefits are one of the largest and fastest-growing line items in your labor cost budget. With costs continuing to outpace wages and inflation, employers that start planning now have more flexibility to control healthcare costs.

A Familiar Cost-Control Pattern

In April and May, Mercer surveyed 604 U.S.-based organizations and found a familiar problem. When healthcare costs rise, many employers push more of the bill onto employees. But that’s a short-term fix with a long-term cost. When employees struggle to afford care, they may delay or forgo treatment, resulting in higher costs, more absences and increased turnover.

Shifting more healthcare costs to employees remains one of the most common ways employers manage rising benefit expenses, according to Mercer’s Survey on Health and Benefit Strategies for 2027. Nearly half (48%) of large employers – those with 500 or more employees – plan to raise deductibles or out-of-pocket maximums for 2027.

A Different Approach Is Getting Traction

Passing along price increases to employees isn’t the only solution employers are considering to control healthcare spend next year, the survey found.

• Nearly one-third (31%) of large employers either currently offer a non-traditional medical plan, such as a high-performance network or variable copay plan, or plan to offer one in 2027, and
• Another 38% are considering one of these approaches.

High-performance network plans typically cost employees less when they choose doctors and hospitals from a preselected network.

“Employers are under intense pressure to manage another year of elevated health benefit cost growth, but they also know that affordability matters deeply to employees,” said Simon Camaj, Mercer’s US Health Leader. “What we’re seeing for 2027 is that employers are using different levers to manage costs — both traditional cost-sharing tactics and strategies that guide their people to higher-value care and provide support where it can have the greatest impact.”

The Healthcare Cost Problem Is Real and Getting Worse

Health plan actuaries are projecting a 9% medical cost trend for 2027 – and that’s after PwC revised its 2026 estimate upward to 9% as well, according to the firm’s annual Behind the Numbers report. 

For the fifth straight year, costs are running well above inflation and wage growth. 

For finance teams building next year’s labor cost model, the starting assumption should be continued upward pressure. The question isn’t whether costs will rise. It’s how you respond.

GLP-1 Medications Are Forcing Hard Choices

Pharmacy costs are rising even faster, driven largely by the near-doubling of GLP-1 prescriptions in the past year alone. At around $1,000 per patient per month, even modest employee uptake creates real budget exposure.

There’s also a follow-up problem: 41% of providers say they don’t have enough visit time to support patients after prescribing GLP-1 medications, according to Maven Clinic’s Beyond the Script report. Coverage without clinical follow-through tends to drive up claims costs over time. 

According to Mercer’s Survey on Health and Benefit Strategies for 2027, 6% of large employers dropped GLP-1 obesity coverage in 2026, and another 5% are planning to or are actively considering it in 2027. Twenty-seven percent have tightened utilization controls. Employers keeping coverage are renegotiating the terms, such as adding prior authorization requirements, narrowing eligibility and taking a harder look at their pharmacy benefit manager relationships.

If GLP-1 coverage is in your benefits package, it warrants its own line in your budget review – not just a passive renewal assumption.

Financial Stress Is Already Costing You Money

When employers raise deductibles and out-of-pocket costs, the financial pressure doesn’t disappear – it transfers to employees. According to Mercer’s 2026 Inside Employees’ Minds survey, covering monthly expenses is now the top concern among U.S. workers, particularly lower-paid employees. That financial stress shows up at work in lost productivity, absenteeism and turnover.

Sixty percent of large employers now offer financial wellness benefits, such as one-on-one financial counseling, and 21% offer debt support. More employers are also expanding EAP offerings to include therapy via text, lowering the barrier to care for employees who can’t make in-person appointments.

Caregiving Conflicts Are Coming for Your Retention Numbers

Return-to-office requirements are colliding with a workforce that has kids in school and aging parents who need care. These pressures often show up as increased absenteeism, schedule change requests and eventual turnover.

Mercer’s Survey on Health and Benefit Strategies for 2027 found that just over half of large employers (51%) plan to offer at least one childcare resource in 2027, such as backup care or a childcare referral service, while 58% provide at least one elder care benefit or resource, such as backup elder care services and elder care leave. 

Employers investing in caregiver benefits aren’t being generous. They’ve done the math on what caregiving-related attrition costs them and decided that the benefit costs less than employee turnover.