2027 employer health insurance premiums could rise 9.5%, according to experts

Workers face higher costs

The average employer-based family plan cost $28,303 this year, a 5% increase from 2025, according to KFF. Workers’ average contributions rose 9% to about $7,470 annually. Over the past five years, premiums, wages and inflation rose at roughly similar rates, while workers continued to pay about a quarter of family premiums. KFF found that 44% of large firms offering health benefits raised employee contributions as insurance costs increased.

Fifteen years ago, average family premiums were $15,220, and workers contributed about $4,190. Matthew Rae, a KFF healthcare marketplace program associate director, said many people with job-based coverage face affordability problems.

Prices drive spending growth

Medical prices are a central reason U.S. health insurance costs are high, said Meredith Rosenthal, a Harvard T.H. Chan School of Public Health professor. Zack Cooper, a Yale University associate professor, found that health spending accounted for 91% of average premium growth from 2011 through 2024.

Hospitals and pharmaceutical companies set prices with limited regulation, Rosenthal said, leaving market competition to restrain costs. She said that approach often works poorly. For example, private-market MRI prices are about twice what Medicare pays, which can negotiate some costs. Cooper said insurer markups are unlikely to explain the increase: average markups fell from about 19% in 2011 to nearly 15% in 2024.

Consolidation limits competition

A relative lack of antitrust regulation is another concern, Cooper said, as hospitals and physician practices continue to consolidate. A 2024 study he co-authored found that more than 1,000 hospitals merged between 2002 and 2020.

The Federal Trade Commission took enforcement action in only 13 instances, the study reported. Cooper said mergers can benefit the companies involved without offering much public benefit, and prices may rise when former competitors combine.

More care and new drugs

The causes of recent spending increases are not fully clear, Cooper said. He suggested insurers may be responding to public criticism of prior authorization by relying on it less; he said reduced use of prior authorization can lead to more healthcare use.

More people used prescription drugs in 2025 than in 2019, according to the Centers for Disease Control and Prevention. An aging population and the greater prevalence of chronic conditions are longer-term drivers of spending, Rae said.

Experts also cited GLP-1 drugs used to manage or treat conditions such as diabetes and obesity. They remain relatively new, under patent and in high demand, factors associated with very high prices.