Employees should expect their healthcare costs to increase in 2027. Employers are bracing for the cost of covering a worker to rise 8.2%, the largest jump since 2003, according to a survey of more than 1,800 employers by Marsh, and about two-thirds of large employers, those with 500 or more employees, already say they'll ask workers to cover more of the premium next year.
NBC News covered this last week, and Larry Levitt, EVP for health policy at KFF, put it plainly: "Healthcare costs are going up faster than they have in years, and open enrollment is when the healthcare affordability crisis is really going to hit home for people."
The economics of healthcare
When I'm working through a problem like this one, I find math comforting. It doesn't lie, and it doesn't care who's loudest.
So here's the math. Dr. Kevin Schulman at Stanford named the mechanism directly in the same article: employers are trying to slow the rate of cost growth, and pushing more of the cost onto employees is the fastest way to do it. Raise premiums. Raise deductibles. Shift more onto the employee and hope next year's number looks better. Those are the two levers most employers are working with this renewal season, and they're the same two levers that have been failing for a decade. Neither lowers what healthcare actually costs.
One household, two silos
Our healthcare system was built for one specific kind of household: one breadwinner, one employer, one plan. A bank won't approve a mortgage without looking at both incomes. A car insurance policy covers the household, not one spouse in isolation. Healthcare still treats each spouse's plan as if the other one doesn't exist. Roughly 30 million American dual-income families make this decision as two separate employees in two separate silos, each reviewing their own options and never their spouse's. It decides whether they can afford the specialist, whether the delivery is covered, whether a diagnosis turns into a financial crisis.
Who's paying, and what it gets them
Employers already pay about $20,000 a year to keep a family on the company plan. Families are covering their share too: nearly $7,000 a year in premiums, on top of a deductible that averages $3,400 to $5,200, while more than half of workers can't cover a $500 emergency expense. Employers are writing the check. Families are absorbing what it doesn't cover. Neither employers nor employees feel the cost of medical coverage is proportionate to its value.
A third option
A spousal HRA works differently. Instead of asking every employee to spend more on healthcare, it gives dual-income households a reason to move to the spouse's plan: it covers the new deductible, copays, and coinsurance they'd otherwise have to hit first. The employer funds the HRA, and the family moves to the spouse's plan. The Total Care Option, the spousal HRA we offer, typically costs an employer about $4,000 a year per household that enrolls, against roughly $20,000 to keep that same family on the company plan. Employers save 76% per household that moves, and that cost leaves the plan instead of showing up on next year's renewal. That's the difference between paying for coverage and being able to use it.
One employee's family enrolled through her spouse's employer and could finally afford to start having children. When she was later diagnosed with cancer, the same benefit covered her treatment. That's what the 76% actually buys.
Families deserve to feel powerful. The system should be simple. And it should make economic sense. Money talks, and it's time healthcare finally listened to what the math is saying.
Employers are going to spend the next few weeks deciding how much of that 8.2% to pass to employees and how much to absorb. Those are the same two levers. There's a third one, and it doesn't require asking anyone to pay more for coverage they already have.
Curious what this could save both your employees and your group?