U.S. Workers Face Rising Healthcare Costs in 2027
Healthcare costs are putting increasing pressure on American workers, and the situation is expected to become even more difficult in 2027. Employers could face their largest health-insurance cost increase in at least two decades.
Americans covered through their employers are expected to spend an average of $5,297 on healthcare in 2026, according to benefits consultant Aon. That is $388 more than in 2025, including both payroll deductions for insurance premiums and out-of-pocket expenses such as deductibles and copayments.
The outlook for 2027 is even more concerning. A survey by benefits consultant WTW estimates that employers’ healthcare costs will rise 11.1% next year, the largest increase in more than 20 years. It would mark the fifth consecutive year of accelerating increases.
Several factors are driving the surge. Expensive cancer treatments, greater use of medical services and the growing popularity of GLP-1 drugs for diabetes and weight loss are all contributing to higher spending. Aon reported that employee use of GLP-1 medications for weight loss increased 75% in 2025 among its clients.
As employers spend more on health insurance, workers are often affected as well. Employees typically pay part of their premiums, so higher insurance costs can translate into larger deductions from their paychecks. They are also facing rising deductibles, copayments, coinsurance and other expenses that insurance does not cover.
Small businesses are feeling the strain particularly sharply. At Paul Wissmach Glass Co. in West Virginia, health-insurance expenses now account for roughly 5% of company revenue, exceeding the firm's profit margin. The company recently increased the biweekly insurance deduction for individual employees from $40 to $50, prompting some workers to drop coverage.
Healthcare spending is also rising faster than incomes, according to Michael Chernew, a healthcare-policy professor at Harvard Medical School. Federal data show that average per-person out-of-pocket healthcare spending reached $1,632 in 2024.
Hospitals’ ability to negotiate higher prices, increased use of healthcare services and the growing cost of advanced treatments are all adding to the pressure. Employers are responding by examining their health-benefit programs more closely, with healthcare costs increasingly becoming an issue for chief financial officers, CEOs and corporate boards—not just human-resources departments.
For workers, the result is straightforward: higher healthcare costs are taking a larger share of household income, and 2027 could bring another significant increase.