U.S. healthcare costs are projected to climb 11% by 2027. Is your strategy ready for what’s next?

Employers are navigating historic cost pressure and rethinking how to deliver, design and finance healthcare and employee benefits. The 2026 Best Practices in Healthcare Survey captures where U.S. organizations stand and where they’re headed. This is a first look at the key findings.

U.S. employers are feeling unprecedented financial strain

Healthcare costs remain the top challenge, with medical trend rates before plan changes projected to reach 11% in 2027. Most organizations are facing unprecedented financial pressure, missing budget targets and expecting elevated cost trends to persist for years.

High-cost claimants, specialty drugs, chronic conditions and cancer care have emerged as the primary drivers of healthcare inflation, with pharmacy costs consuming a growing share of total spend (Figure 1).

Pharmacy costs are becoming a greater share of overall spend — expected to increase from 24.6% in 2025 to 25.5% in 2026. Costs are projected to reach nearly 27% in 2027.

Shifting toward cost control

While employers see the need for change, they’re reluctant to make changes that lead to member pushback (Figure 2).

Only 15% said they would be willing to make significant changes for a 5-percentage point reduction in healthcare costs.

However, changes may be coming as companies expand cost-sharing and tighten coverage restrictions. Almost half (49%) recognize the need for significant program changes in the next three years, up from 34% in 2025.

Healthcare costs are projected to rise 11.1% in 2027

This represents the highest employer healthcare cost increase in more than two decades and the fifth consecutive year of sustained cost growth. While employers are currently cautious about cost-saving measures that may adversely affect our members, change may be on the horizon.

• Employer confidence that they will continue sponsoring healthcare benefits in 10 years dropped from 85% to 79% in a single year.
• 78% say cost control is dominating healthcare strategy, compared with 22% who prioritize improving the employee value proposition.
• Finance is becoming increasingly involved in healthcare decisions, signaling that healthcare is moving beyond HR and onto the broader business agenda.
• 68% of employers report healthcare cost growth is outpacing growth in their total rewards budgets.
• Nearly half of employers (49%) believe significant healthcare program changes will be required within the next three years, up from 34% a year ago. Yet 56% say they aren’t willing to make disruptive changes. 61% aren’t willing to absorb the operational complexity required to achieve cost reductions, although 81% feel confident in their ability to manage change.

What the full report will explore

The full 2026 Best Practices in Healthcare Survey report will examine how employers are responding to sustained cost pressure while balancing affordability, employee experience and health outcomes. The findings will explore:

• The forces reshaping healthcare costs and employer budgets
• How organizations are approaching plan design and cost sharing
• Where employers are investing in navigation and condition management
• How pharmacy, GLP-1 medications and AI are influencing future strategies