Employer-sponsored health coverage is getting more expensive just as workers are being asked to shoulder more of the bill. A Mercer survey of 1,800 employers says health benefit costs per employee are expected to jump 8.2% in 2027, the steepest increase since 2003 and the fifth straight year of elevated growth.
The pressure is already hitting health care workers and the practices that employ them. Jack Dillon, executive director of the Association for Independent Medicine, said his own practice faced a 22.5% increase, forcing a choice between absorbing the cost and raising employees’ share of premiums. He said he has heard more concern about insurance costs this year than in a long time.
More than 165 million Americans rely on employer-sponsored health coverage, but employers are finding it harder to finance. Dillon said some independent practices are considering dropping health benefits and offering higher wages instead, while others may reduce benefits or consolidate staff. Nick Stefanizzi, CEO of Northwell Direct, said rising benefit costs eat into money that could be invested in wages.
The burden is showing up in household budgets. Samantha LeGault, an Idaho nurse practitioner, told KFF Health News that the monthly premium for covering herself, her husband and their four children rose from $700 to $1,500 this year. Because she has Crohn’s disease and two of her daughters also have medical conditions, she said dropping insurance was not an option, so she gave up dental coverage instead.
Joshua and Ashley Durham, who run a family practice in Idaho, made the opposite calculation. According to KFF Health News, they dropped coverage for themselves and their two children after premiums for a similar plan climbed several hundred dollars to nearly $1,600 a month. The family is paying for care out of pocket using a health savings account that held $50,000.
The broader numbers are not much kinder. Employers paid an average of $3.48 per employee hour toward health insurance in June, out of $14.07 spent on benefits overall, according to Bureau of Labor Statistics data. Health insurance already accounts for nearly a quarter of what private employers spend on benefits.
Working in health care does not guarantee coverage, either. In 2024, 10.5% of health care support workers were uninsured, more than twice the 3.8% recorded among health care practitioners and technical workers, according to the Census Bureau. Among adults ages 19 to 64 overall, the uninsured rate was 11%.
The market has already voted on the policy reality here: when premiums rise faster than wages, coverage gets thinner and employer flexibility shrinks. Capital rewards clear rules, not a system where medical workers themselves are priced out of care. The result is predictable: more money diverted from wages, more pressure on small practices, and less room for free enterprise to do what it does best—allocate scarce dollars where they work hardest.
