As Open Enrollment approaches, employers are bracing for the biggest increase in employee health benefit costs since 2003 – a projected 8.2% per employee. This projection marks the fifth consecutive year of increased health benefit costs, reflecting a substantial acceleration from the 6.7% increase projected for 2026. Data from a recent survey by MARSH indicates that without employers taking steps to reduce costs, the price of existing health plans could rise by approximately 11% for American employees.

Why Are Costs Rising?

There are multiple reasons for these price increases. One major factor is the continued development of new medical treatments and technologies. While medical advances may improve the overall outcome for patients, their implementation means higher costs for medical facilities and, in turn, higher costs for patients. Another ongoing factor is the consolidation of hospitals and healthcare providers. As healthcare systems become larger, they have greater negotiating power, establishing higher payment rates with insurers. In addition, the increased usage of GLP-1 weigh loss medications is also contributing to increasing costs. MARSH estimates that rising GLP-1 use will account for about one percentage point of overall health benefit cost growth in 2027.

Other Factors Driving Increased Costs

MARSH’s actuaries estimate that two other factors are likely contributing to rising healthcare costs – AI-assisted billing and the implementation of the No Surprises Act.

With AI-use growing more prevalent in our daily lives, many healthcare facilities are incorporating the technology into their patient billing protocols. According to recent data, these systems have contributed to an increase in the number of claims submitted for reimbursement, with more “higher-level claims” among them.

Passed by federal legislators in 2020, the No Surprises Act was put in place in order to protect patients from unexpected bills after they receive care from out-of-network providers. But since its implementation in 2022, the law has had unintended consequences – case volume and payment amounts awarded to providers through the Independent Dispute Resolution process have been much higher than anticipated.

What Does this Mean for Employers?

According to a recent study, 59% of employers expect to make cost-cutting changes to their health benefits in 2027. Some of those changes could involve higher deductibles or other forms of cost sharing, potentially increasing the amount employees pay when they use healthcare services.

Another MARSH survey, which polled around 1,800 employers, showed that approximately ⅔ of corporations with 500 or more employees expect to increase the share of premium costs paid for by employees in 2027.

Better Options Are Out There

At Solidarity HealthShare, we are actively working to provide our Members and their families with affordable healthcare. As traditional healthcare premiums continue to rise, we are committed to providing reliable alternatives, so families don’t have to compromise their health in order to cover other essential expenses. Our Members know that we will advocate for their needs and continue to expand access to affordable, transparent care. Quality healthcare should never come with a cost barrier. For more information about joining the Solidarity community, please contact our Member Care team today at 737-SHARING or check prices online.