GLP-1, autoimmune and cancer drugs contribute to the increase

U.S. employers project a median health care cost increase of 10% for 2027, according to Health Care Costs Pulse Survey: 2027 Cost Trend, a new survey from the International Foundation of Employee Benefit Plans. A similar International Foundation survey conducted in 2025 also projected a 10% increase for 2026. 

Causes of Cost Increases  

Employers shared their thoughts on the primary factors contributing to a rise in medical plan costs for 2027. The top four factors (listed by the percent of respondents who identified them as primary causes) are as follows:  

• 32%—Catastrophic claims (up from 31% last year) 

• 21%—Specialty/costly prescription drugs (down from 23% last year)  

• 14%—Utilization due to chronic health conditions or mental health (down from 15% last year) 

• 13%—Medical provider costs (up from 11% last year).  

Respondents who selected specialty/costly prescription drugs as a primary reason for the cost increase indicated that the following types of drugs were predominantly responsible: 
   

• 67%—GLP-1 drugs (up from 59% last year) 

• 54%—Autoimmune and inflammatory therapies (new response option in 2026 survey) 

• 42%—Cancer drugs (down from 50% last year) 

• 21%—Cell and gene therapy (no change from 2025 survey). 

When I spoke with Carey Wooton, CEBS, Associate Vice President of Education at the International Foundation she noted that this marks the second consecutive year Foundatin research has projected a 10% increase in health care costs for the coming year. She added that catastrophic claims and specialty/costly prescription drugs continue to be cited as primary factors for increases. Cost-management techniques remain important for plan sponsors, with respondents indicating cost-sharing initiatives as less impactful and administration/data analysis initiatives growing in expected impact.

 Managing Costs  

When asked what types of initiatives would be the most effective in managing costs for 2027, respondents indicated the following strategies for the upcoming plan year:  
  

• 19%—Cost-sharing initiatives: e.g., deductibles, coinsurance, copays, premium contributions (down from 27% last year)  

• 15%—Plan design initiatives: e.g., dependent eligibility audits, high-deductible health plans, spousal surcharges/carve-outs, formulary changes (down from 17% last year)   

• 14%—Purchasing/provider initiatives: e.g., telemedicine, price transparency tools, centers of excellence, health care navigators/advocates, coalitions, quality initiatives (down from 17% last year) 

• 13%—Utilization control initiatives: e.g., prior authorization, case management, disease management, nurse advice lines (up from 12% last year). 

• 11%—Administration/data analysis initiatives: e.g., claim audits, utilization review, predictive modeling, AI (up from 7% last year). 

Survey responses reflected in this report are from corporate employers and do not include public plans or collectively bargained plans. Visit www.ifebp.org/healthcarecosts2027 for more information.