U.S. employers could face another sharp increase in healthcare costs in 2027, according to Marsh & McLennan Companies, Inc. MRSH. A Marsh survey of more than 1,800 employers shows that average health benefit costs per employee could climb 8.2% next year, even after companies take steps to curb the increase. If those measures were not in place, employers estimate costs could rise about 11%. The projected increase would be the steepest since 2003.
Marsh points to expensive new treatments, rising provider charges, greater use of GLP-1 weight-loss drugs, AI-assisted medical billing and out-of-network payments. GLP-1 usage alone is expected to add about one percentage point to health benefit cost growth in 2027.
Employers are responding by reworking plan structures. Marsh found that 59% of companies plan to make cost-reduction changes to their health plans for 2027, including higher deductibles. Roughly two-thirds of large employers also expect workers to shoulder a larger share of premium costs. Employee paycheck deductions could therefore rise faster than overall employer health benefit expenses.
Aon Echoes the Healthcare Cost Warning
Aon plc AON is pointing to a similar buildup in healthcare costs. It recently stated that it expects employer healthcare costs to rise 9.5% before mitigation, citing higher utilization, specialty-drug spending, provider pricing and billing practices. Marsh’s estimate is even steeper at 11% before cost-control actions, easing to 8.2% after planned measures.
Both firms see employers leaning more on data, plan redesign and care steering. Marsh says 12% of large employers plan to offer variable-copay plans, with adoption rising to 18% among companies with at least 20,000 employees. In addition, 58% of large employers rank steering workers toward higher-quality care among their top priorities.
For investors, the spending surge creates two distinct opportunities: stronger demand for benefits consulting and greater need for insurers that can help employers control costs.
For MRSH, this can support demand for benefits consulting, analytics, plan design and cost-management services. Employers facing costly claims and complex pricing need more help balancing affordability with coverage. That can create recurring advisory opportunities, deepen client relationships and increase demand for Marsh’s Health and Benefits expertise.
Marsh currently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for 2026 EPS stands at $10.44, implying 7.1% year-over-year growth, while the 2027 estimate of $11.38 points to another 9% increase. Both estimates received two upward revisions over the past month and no downward revisions. MRSH also beat earnings estimates in each of the past four quarters, with an average surprise of 4.1%.
Rising Costs Create Both Risks and Opportunities for Health Insurers
Rising medical utilization and provider prices can squeeze health insurers when claims costs outpace premium increases. Yet employers looking to control healthcare spending may also place greater value on insurers and service platforms that can improve care management, pharmacy costs, network efficiency and benefit design.
UnitedHealth Group Incorporated UNH is well positioned to capture some of that demand through both UnitedHealthcare and Optum. Employers dealing with higher benefit costs may turn to UnitedHealthcare for plan redesign, care navigation and more efficient coverage options. Optum can benefit from increased use of pharmacy management, analytics, value-based care and other services aimed at reducing spending.
Higher drug costs can also support demand for Optum Rx’s purchasing scale and pharmacy capabilities. UnitedHealth’s integrated model can deepen employer relationships, generate recurring revenues and support cross-selling.
UNH’s commercial mix provides another layer of protection. At the end of the second quarter, it had about 22.3 million commercial fee-based members compared with 7.7 million commercial risk members. The larger self-funded base limits direct underwriting exposure to medical-cost volatility. Meanwhile, better cost trends and management actions helped reduce its medical care ratio to 86.7% from 89.4% a year earlier.
UnitedHealth also carries a Zacks Rank #2 at present. The consensus EPS estimates for 2026 and 2027 are $19.82 and $22.54, indicating growth of 21.2% and 13.7%, respectively. The estimates saw two and three upward revisions over the past month, with no downward moves. UNH topped earnings estimates in each of the past four quarters, delivering an average surprise of 12.1%.
Meanwhile, Centene Corporation CNC offers a different way to play the same healthcare-cost trend.It has less direct exposure to employer-sponsored coverage because its commercial business is centered on the ACA Marketplace. Still, rising employer healthcare costs could open another growth avenue through Individual Coverage Health Reimbursement Arrangements, or ICHRAs.
ICHRAs allow employers to fund employees’ individual health plans instead of offering traditional group coverage.Centene says ICHRA adoption among businesses increased 34% from 2024 to 2025, pointing to growing interest in the model. Centene is positioning Ambetter Health Solutions to participate in that shift. The company is offering ICHRA-compatible coverage in 13 states in 2026. If ICHRA adoption continues to expand, Centene could add members, support premium growth and broaden its commercial reach.
Centene is not insulated from rising medical costs. However, its second-quarter commercial health-benefits ratio improved to 79.2% from 90.6% a year ago, helped by better pricing and risk transfer.
Centene currently sports a Zacks Rank #1 (Strong Buy). The consensus EPS estimate for 2026 is $4.89, implying a 135.1% year-over-year increase, while the 2027 estimate of $5.34 suggests 9.2% growth. Those estimates received two and three upward revisions, respectively, over the past month, with no downward changes. CNC beat earnings estimates in each of the last four quarters, posting an average surprise of 151.3%. You can see the complete list of today’s Zacks #1 Rank stocks here.
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