The Real Reasons Why You Keep Paying More For Employer Healthcare

U.S. employer healthcare costs are expected to surge again next year – but why is this the case?

Ireland OwensAug 24, 20264 min read

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U.S. employer healthcare costs are expected to surge again next year – but why is this the case?

A recent report from benefits consultant Aon projects that employer healthcare costs in the U.S. are set to climb 9.5% in 2027, pushing average costs above $19,000 per individual employee. Analysts told the Daily Caller News Foundation that factors such as a lack of price transparency across the nation’s healthcare system and the rollout of costly hospital services could be driving up these costs.

“The lack of price information in healthcare drives up all costs, including for employer health plans,” Save Our States senior fellow Sean Parnell told the DCNF. “Insurance passes on cost increases that come from hospitals and physician and clinical services (those categories account for more than half of healthcare spending). This lack of information is related to the fact that most payments are made by third parties, like insurance or government programs, which make people less interested in what things cost.”

Parnell noted that Congress is considering legislation to “require more price transparency from hospitals, other providers, and insurers.” He added this “would help and is the right first step.”

“Beyond that, we need to rebuild direct relationships between patients and doctors so that people can shop for the best care and providers are rewarded for keeping costs down,” he noted.

Employers now absorb over 80% of health plan costs, according to Aon’s report.

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Some lawmakers have recently called for increased healthcare price transparency nationwide. A PatientRightsAdvocate.org report released in September 2025 found that 43% of reviewed hospitals are posting fewer prices now compared to in 2024.

Additionally, a poll from The Center Square released Saturday shows that 88% of U.S. voters thought it was at least “somewhat important” for patients to be able to access medical care prices.

Parnell went on to say that introduction of certain “costly” new medicines could potentially drive up health costs in the U.S.

“One additional factor that has been driving health costs higher is the introduction of innovative medicines that have great potential for improving health and extending life and that are also very costly,” he explained. “For example, the recent announcement of a ‘vaccine’ for melanoma is a great accomplishment and will do a lot to save lives, and at the same time we need to recognize that these sorts of treatments are going to increase health costs.”

The high cost of some prescription drugs is hiking up overall U.S. healthcare costs, according to healthcare company Highmark.

Some of the primary drivers of rising health costs across the nation include the continued adoption of GLP-1 treatments and increased spending on hospital care, Manhattan Institute senior fellow Chris Pope said.

“The main reason for rising health insurance costs is simply that ‘healthcare’ includes more and more things every year,” Pope told the DCNF. “This is most obvious in the case of drugs, such as Ozempic, which didn’t even exist a few years ago. They cost thousands of dollars per course of treatment, and millions of patients are now using them. Insurers often pick up most of this cost. A similar dynamic exists with new hospital services: whenever a hospital upgrades its equipment, opens a new building, or deploys a new surgical procedure which previously didn’t exist, spending on hospital care increases enormously.”

“This gets passed on into the cost of private health insurance, 90% of which is funded by employers,” he added.

Some experts have recently warned that GLP-1 drugs could contribute to higher health costs in the U.S. GLP-1 agonists refer to medications that help bring down blood sugar levels and boost weight loss, according to the Cleveland Clinic.

Almost 8 in 10 employers said that GLP-1 medications are fueling higher healthcare costs at their companies, according to a Business Group on Health survey released in May.

Pope also explained that Americans are unlikely to see a drop in employer-sponsored health insurance costs in the near future.

“Although the cost of some drugs might decline as patents expire; technological developments make it likely that these savings are exceeded by the cost of new drugs (many of which may be for previously untreated conditions) which become available,” Pope said. “It may be possible to reduce the cost of employees’ health insurance by giving them control over the purchase of plans.”

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