Employers, Workers Face Rise in Healthcare Costs

BY ANNA WILDE MATHEWS AND PETER LOFTUS

Healthcare costs are walloping U.S. workers, and they will only worsen next year. For 2027, employers may be facing the biggest health-insurance increase in at least two decades.

Americans with workplace coverage are expected to spend an average $5,297 this year on healthcare, $388 more than 2025, according to a new estimate from benefits-consulting firm Aon. The spending represents a combination of payroll deductions for premiums and out-of-pocket charges like deductibles and copays.

The burden is likely to grow significantly next year, when U.S. employers expect their healthcare costs to go up by 11%, according to a new survey from WTW, another big bene--fits consultant—the steepest rise in more than 20 years.

That would represent the fifth year of escalating increases, according to WTW. “Employers are telling us that this is utterly unsustainable,” said Jeff Levin-Scherz, population- health leader at WTW. Expensive cancer treatments and wide adoption of weightloss drugs are among the factors pushing up spending.

At larger companies, the rapid rise has moved decisions around health benefits from the domain of human-resources executives into the Csuite, said Mike Pasterick, North America health-solutions leader at Aon. “We’re seeing a lot of interest now from the finance organization and even the CEO and the board.”

As companies are forced to pay more for insurance, their workers, who typically pay a share of the premium, are seeing their own costs rise roughly in tandem. That means more dollars are held out of their paychecks each month.

At Paul Wissmach Glass Co., which employs 35 people in Paden City, W.Va., co-owner Jason Wilburn said he has been hit by double-digit premium increases each year since his family bought the company in 2021. Health-insurance expenses now con sume about 5% of the firm’s revenue—more than its profit margin.

This year, the company raised the biweekly payroll deduction for a single worker to $50, from $40. Though the employer is still paying about 90% of the total premium, a few workers decided to drop their coverage when their costs went up.

“It’s frustrating and sad,” Wilburn said. “Something’s got to change.”

Americans are paying more out of pocket for healthcare in the form of deductibles, copayments and coinsurance, as well as expenses not covered by their insurance, according to federal data.

“Healthcare spending recently has risen more quickly than income,” said Michael Chernew, a healthcare-policy

professor at Harvard Medical School.

The accelerating increase in health-insurance costs—and workers’ expenses—is fueled by a variety of factors, according to benefits consultants and insurers. Hospitals have been able to win price increases and are increasingly using artificial-intelligence tools to boost their billing, leading to higher payments.

Workers are also using more medical services and taking high-cost drugs for an array of conditions. Among the major causes for rising costs are cancer treatments and the popular diabetes and weight-loss drugs known as GLP-1s. Employee utilization of GLP-1 drugs for weight loss grew 75% in 2025 across Aon’s clients, the firm said.