PNHP

Job-based Insurance: Cost Shoots Up, Coverage Falls

The cost of health insurance at work will rise by 11% next year, substantially off-loaded onto workers. That yields a ten-year rise of 76%. Private insurance is out of control.

Employer Health Costs Are Expected to Spike in 2027, The New York Times, September 2, 2026, by Reed Abelson

Large and small employers are bracing for what looks to be the sharpest increase in health care costs in more than two decades. The cost per worker is projected to go up an average of 11 percent next year, or somewhat lower if workers’ insurance benefits are reduced.

The employers’ final costs, after they make changes to health plans, are still expected to increase about 8 percent next year, the steepest since 2003, according to Marsh, the benefits consultant formerly known as Mercer.

From 2018 to 2027, health care costs could increase 76 percent, roughly twice the rate of general inflation, according to a survey the employer group released last month.

Insurance broker Aon estimated employers’ costs would rise 9.5 percent next year, pushing the average cost per employee above $19,000 if no changes are made.

The upshot is that about 160 million people under 65 who rely on employers for health insurance will again confront higher costs and shoulder more of the burden. More and more, workers are facing year-over-year increases that further stress household budgets already dealing with the growing expenses of groceries and gasoline.

The pressure by hospitals and doctors to charge employers even more is likely to intensify with looming cuts to government plans like Medicaid, the federal-state program for low-income individuals. Hospital groups are already seeing an increase in the number of patients who don’t have insurance or can’t pay their bills, and many are expected to charge employers more to help make up for lost revenue.

Many employees are already being asked to pay significantly more of their medical bills. Workers are paying an average of 10 percent more in out-of-pocket costs in 2026 — some $2,167 — than they were last year, Aon estimated.

Comment:

By Don McCanne, M.D.

There are plenty of studies demonstrating that an improved version of Medicare, designed to provide comprehensive coverage for everyone, free at the point of service, funded by progressive income and wealth taxes and publicly administered, would actually be fully affordable for everyone because of the shift in costs from the less affluent to the very wealthy. Medical bills would not create a financial hardship for billionaires. Medicare for All is gaining ever greater public support as people realize that it really would work for all of us.

However, many of the affluent and the opponents of public programs have argued that the current system is working well, and that people should have the right to keep the insurance they have.

Is the current system working well? Not for those who actually need a significant amount of health care, nor for those who are paying large amounts for their current insurance, through premiums, cost sharing, and the hidden reduction in their incomes that employers use to help pay for these costs. Not only are health care costs increasing an estimated 76 percent this decade, the health benefits are diminishing because of higher employer costs.

If you don’t believe this isn’t a problem, look at what is happening to health spending under today’s “ideal” employer sponsored plans. When health care costs are already unaffordable for a large percentage of us, not only are health insurance costs rising at a rate higher than inflation, insurance plans are providing less care than formerly. Costs are out of control and will harm a large percentage of individuals and families with low or modest incomes, both through financial hardship and through impaired access to necessary medical care.

The data is in. We need health care that is accessible to everyone and that will no longer create financial hardships. We should no longer accept the nonsense that people should be able to keep the overpriced and inadequate plans that “they want.” They don’t want them if they are going to cause further financial hardship and erect barriers to the care that they need. What they are now realizing is that they do want a program that provides full access to the care they need while eliminating the financial barriers that they now face. That’s single payer, improved Medicare for All.

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