A survey of 127 of America's largest employers has delivered an uncomfortable verdict: even companies with the most negotiating leverage in the health care market cannot make costs behave. [1]
The Business Group on Health, whose membership includes many of the country's biggest private employers -- half of them with more than 25,000 workers -- polled its members on their 2027 outlook. The finding: from 2023 through 2025, health care costs rose faster than these companies had predicted, in each of three consecutive years. For 2026, the group now projects growth of 8.5 percent. For 2027, it expects 9.2 percent -- and both figures assume employers make no changes to benefits that might soften the blow. [1]
"Employers' ability to accurately predict their health care costs is not just a budgeting problem," Ellen Kelsay, the Business Group on Health's chief executive, told reporters this week. "It's emblematic of a bigger picture issue with the overall health care system." [1]
The finding lands awkwardly against a decades-old industry argument: that scale confers power. Large self-insured employers negotiate directly with hospital systems, pharmacy benefit managers and insurance carriers, and conventional wisdom holds that buying power should translate into predictable costs. Instead, the survey suggests the opposite -- volatility that even the country's most sophisticated purchasers cannot model three years running.
Kelsay's advice to employers was correspondingly blunt: reconsider whether the insurers, consultants and other vendors managing these benefits "are delivering meaningful value." [1] That is a pointed question for an industry built on the premise that intermediaries reduce costs rather than obscure them.
The pain is not evenly distributed. Small businesses, which lack the scale to self-insure or negotiate directly with carriers, are already dropping health coverage at record rates, according to reporting STAT has tracked across its ongoing health-insurance-costs series this year. [1] If the biggest employers in the country cannot hold the line on their own costs, the incentive for smaller businesses to keep offering coverage at all keeps shrinking.
None of this shows up as sticker shock for most workers immediately. Employers absorb much of an increase before passing costs along through higher premiums, larger deductibles or narrower plan choices -- decisions that typically surface during open enrollment season, months after surveys like this one are published. That lag is part of why a story aimed at benefits managers reads, on its face, like an internal trade item rather than a preview of what millions of paychecks will look like next year.
The Business Group on Health frames its survey as a planning tool for member companies. But the plainer reading is that the country's largest, most professionally managed purchasers of health care -- employers with in-house benefits teams, outside consultants and the collective bargaining power of a Fortune 500 roster -- have spent three straight years failing to predict their own costs. If they cannot see it coming with all of that infrastructure, workers waiting for their next enrollment packet have even less reason to expect stability when their turn comes.
-- NORA WHITFIELD, Chicago