Employer health costs projected to rise 9.5 percent

A new risk analysis released by leading insurance broker Aon this week projected that employer health costs in the U.S. will rise by roughly 10 percent in 2027.

Aon, the second largest global insurance broker, projected that at the current status quo, employer healthcare costs will rise by 9.5 percent next year. This would mean spending an added $19,000 per employee on average and would mark a fourth consecutive year of near-double-digit percentage increases.

The firm noted, however, that many employers will likely implement “cost-saving changes or programs” to mitigate expected costs.

Aon identified “rising medical utilization, chronic disease prevalence and growth in drug spending” as factors contributing to the rising costs.

Their projections found that health plan costs will rise across all industries, with the highest spikes anticipated for finance and insurance; technology and communication; and the public sector.

“Employers have now experienced several consecutive years of health care cost increases that are approaching double digits,” said Mike Pasterick, Aon’s North America health solutions leader, in a statement.

“At this level, rising health care costs become much more than a budgeting challenge and influence organizational decisions from benefits strategy and employee affordability to broader workforce and financial planning priorities,” he added. “Leaders are undergoing pressure to maintain affordable benefits while continuing to invest in attracting, supporting and retaining talent.”