Employer health care costs brace for a volatile 2027

Employers are staring down a budgeting problem they haven't faced before. For three years running, actual health care costs have blown past what employers predicted — and each miss has been bigger than the last. Now a new survey puts numbers on just how bad the volatility has gotten heading into 2027, and the figures are enough to pull CFOs and senior leadership directly into benefits decisions that used to stay with HR.

One condition keeps topping the list of what's driving the spend, and its grip is tightening. Pharmacy has become a budget line unto itself, with one class of drugs facing renewed scrutiny even as coverage decisions grow more complicated — a tension Medical Economics has been tracking closely as employers weigh GLP-1 coverage for 2027. Meanwhile, the gap between health care cost growth and everyday inflation keeps widening, adding to the affordability squeeze already hitting employer-sponsored coverage. Employers aren't standing still, though — they're leaning harder on RFPs, cutting underperforming vendors, and expanding Centers of Excellence in ways that could reshape how physicians interact with employer health plans.

Here are the key findings: