Benefits leaders spent October explaining plan changes. They will spend the first quarter of 2027 hearing how those changes felt. Judging by the cost data published this fall, that conversation will run long.
Costs Are Outrunning Budgets
Marsh projects total health benefit cost per employee will rise 8.2% in 2027, the steepest jump since 2003. That figure already accounts for the cost-cutting moves employers plan to make. Left alone, the increase would reach 11%.
WTW lands in the same neighborhood. Employers in its 2026 Best Practices in Healthcare Survey project an 11.1% increase before plan changes and 9.7% after, so a full round of redesign buys back less than a point and a half. Pharmacy carries an outsized share of the pressure. Among the 471 employers surveyed, 83% named pharmacy spending as a leading cost driver, second only to high-cost claimants, and WTW expects pharmacy costs to climb 11.5% this year, up from 9% in 2025.
Employers Want Relief Without the Backlash
That puts HR in a tight spot. Employers know they have to change course, yet WTW found they are reluctant to make changes that lead to member pushback. Employees are already anxious. In a BenefitHub survey of nearly 13,000 workers released in October, 77% said they worry about out-of-pocket medical costs.
The usual levers create exactly that pushback. Fifty-nine percent of employers in the Marsh survey plan cost-cutting changes for 2027, including higher deductibles that raise what members pay at the point of care. Meanwhile, Insurance Business reports that gaps in claims data leave many employers struggling to explain their increase, let alone act on it with precision.
GLP-1 Cuts Are Landing During Open Enrollment
The loudest cut of the season involves weight-loss drugs. Business Group on Health data shows 14% of employers have dropped or plan to drop GLP-1 weight management coverage by 2027, up from 10% earlier in the year. Starbucks ended coverage of GLP-1s prescribed for weight loss in October.
WTW found employer coverage of GLP-1s for weight loss fell from 57% to 53%. It was the first drop in three years. Among employers that dropped coverage or are considering it, 91% cited cost.
Employees on these drugs for weight management will pay far more in 2027. Benefits advisers quoted by Insurance Business say employers that dropped coverage should explain the change early and clearly, beyond a line in the summary plan description.
Employees Will Carry More of the Bill
The cost is moving toward the paycheck. WTW found that 85% of employers are planning or considering shifting more cost to employees through premium contributions by 2028, compared with 44% doing so today. Marsh adds that about two-thirds of large employers expect to raise the employee share of premiums next year.
Put the four findings together and a familiar bind appears. The budget demands savings, and nearly every obvious savings lever makes employees unhappier.
The Savings Hiding in the Gray
Some savings come without that tradeoff. Our Physician Drug Cost Survey 2026 found that 40.4% of physicians rebuild a patient’s medication list from the pill bottles the patient brings to the appointment. Only 12.5% rely on the EHR to see everything a patient takes. When a patient sees three doctors, duplicate prescriptions and refills for drugs they no longer need keep getting filled, and the plan pays for each one.
Physicians will act on better information. In the same survey, 95% of physicians said they feel comfortable switching a patient to a lower-cost, clinically appropriate alternative. Members are on board too. In our 2026 State of Drug Access Survey, 83.9% of insured adults said they want their provider to move them to the lowest-cost option automatically.
How RazorMetrics Turns Waste Into Savings
RazorMetrics captures savings through the people members already trust, their own physician. Using AI as an ally to identify lower-cost options, we then deliver each recommendation to the prescriber inside the workflow they already use. The final decision stays in the hands of the physician.
For a benefits team bracing for 2027, the math looks scary, but it isn’t out of your control. Our solution gets you ahead of the drug cost spike.
Contact RazorMetrics and find the savings already sitting in your claims.
