Billionaire Mark Cuban says the real pressure on jobs is not artificial intelligence, but the cost of health care benefits.
In an X post last month, Cuban wrote: 'I hope people realize that for the foreseeable future, the cost of health care benefits will get more people fired, or not hired, than AI.' He has made the issue a central part of his public comments after founding Cost Plus Drugs in 2022.
The numbers come first. U.S. health care spending stood at $5.3 trillion in 2024, or about 18% of GDP, according to the Centers for Medicare & Medicaid Services. That is more than double the $2.5 trillion the country spent in 2000. The U.S. also spent $14,775 per person on health care in 2024, almost double the $7,860 per person spent in other high-income countries.
Costs have kept climbing. Mercer said health care costs have risen each year over the past five years in a survey of more than 1,800 employers. Mercer estimates health care costs per employee could rise 8.2% in 2027, the largest jump since 2003.
For companies, that is not a small accounting issue. Mercer found nearly half of large U.S. employers with 500 employees or more expect to change medical plans next year, including higher deductibles or copays that would increase out-of-pocket costs for workers. A 2024 paper published by Yale’s Tobin Center for Economic Policy found that a 1% increase in health care prices translates to roughly a 0.4% decrease in payroll and employment at employers outside the health sector.
The paper said employers often respond by cutting the number of workers they employ rather than cutting wages. That is the kind of incentive structure that matters to capital, margins and hiring decisions.
Cuban has also argued that the system itself is part of the problem. He said his Cost Plus Drugs business can offer lower prices by cutting out pharmacy benefit managers, which KFF says manage about 80% of all prescription claims in the U.S. He has also backed the Break Up Big Medicine Act, sponsored by Sen. Elizabeth Warren and Sen. Josh Hawley, which would prohibit certain forms of vertical integration in health care. The bill has been referred to the Senate’s Committee on the Judiciary and has not passed.
Cuban’s point is blunt: if Washington and the health care complex keep pushing costs higher, employers will keep looking for relief in payroll, benefits and headcount. AI may change how work gets done, but bloated health care costs are already changing who gets hired.
For free enterprise, the lesson is simple. When a basic input becomes this expensive, businesses do what they always do: protect margins, slow hiring and pass costs along. The taxpayer and the worker end up carrying the burden while the administrative state and the middlemen keep their leverage.
