Rising healthcare costs for 2027: Five takeaways

Businesses are expecting to pay more for healthcare costs in the coming year.

A new survey from the Business Group on Health says employers are projecting a 9.2% increase in healthcare costs for 2027. With changes to health plans, that increase may be knocked down a bit to 8%. But employers, and workers, look to be spending more on healthcare.

Here are some key takeaways from the report.

1. Higher prices, and more unpredictability

It’s not just that prices are going up. They’re getting more unpredictable. Businesses say cost increases in 2025 actually exceeded their projections. Ellen Kelsay, president and CEO of the Business Group on Health, says volatility is the new reality. She also says the 2027 projections on higher costs may be too optimistic, and the forecast isn’t exactly bright.

2. Rising drug prices

Businesses are spending more on drugs and medications. Drug costs are expected to rise 12% this year. Pharmacy now accounts for 25% of employers’ total healthcare spending.

Among the big costs in pharmacy spending: GLP-1 drugs. Some employers are dropping coverage of GLP-1 for weight loss. 60% of employers say they’re covering GLP-1 drugs, down from 72% in 2025.

Here’s a telling finding: None of the businesses surveyed said they’d add GLP-1 coverage for weight management.

3. Higher hospital costs

A majority of businesses say they’re being hurt by higher hospital prices, and they say they’re going to be pressing health systems to do better on prices. Employers are having direct conversations with health systems and hospitals, and they’re talking about both the cost and quality of care.

Businesses are also leaning on health plans to press hospitals to do better on costs.

4. Cancer care driving costs

Employers say cancer is the top condition driving healthcare costs. It’s the fifth consecutive year cancer has been cited as the most costly condition in the business group’s annual survey.

But there’s a sharp uptick this year, as 70% of employers say cancer was the top condition driving up costs, up from 58% last year.

More patients are getting diagnosed with cancer, and more patients are being diagnosed at younger ages. The group also cites the rising costs of treatments, which are offering more hope for patients, but also leading to higher expenses.

5. Rethinking strategies

Finally businesses are facing higher costs, and they are looking to new strategies. Businesses are focusing more on prevention and primary care. They are also taking a harder look at their vendor relationships. Over half of employers said they’d end relationships with vendors that they say are underperforming.

But businesses are paying more for healthcare, and that has implications for hospitals, health insurers, drug companies, and most importantly, the patients who need care.