2027 Healthcare Renewal Increases Above Historical Norms
For Your Benefit - November 2026

Internal Links Laurie Milligan

In my 14 years with the VBA Benefits Corporation, our 2027 healthcare renewal increases are the highest I have seen. We are not alone. According to a Mercer Pulse Survey (see chart below), the average 2027 renewal increase is 12.3%, compared with 10.3% in 2026 and single-digit increases in prior years.

What is driving these increases? Rarely can they be attributed to a single factor. Traditional drivers, such as medical inflation and service utilization, continue to shape projections for future claims. Additional pressures are also contributing to rising healthcare costs, including:

  • Price and reimbursement: Higher labor, supply and facility costs, along with provider consolidation and cost shifting from public programs such as Medicare and Medicaid.
  • Utilization: Higher-severity coding and AI-enabled revenue capture that can increase reimbursement per encounter.
  • Pharmacy innovation:  Growing use and cost of specialty biologics, oncology therapies and GLP-1 medications.
  • Demographics and disease: An aging population, chronic conditions and increasingly complex cancer treatment, including diagnoses at younger ages.
  • High-cost claimants: Ongoing treatment for more high-cost claimants, supporting longer survival while contributing to higher stop-loss premiums.

Advances in medical technology, including AI-assisted tools, are creating new opportunities to treat illness and manage chronic conditions. These developments can help people live longer, but they can also add to healthcare spending. Together, these pressures suggest that employers should prepare for continued cost challenges rather than assume a return to historical renewal levels.

There is no single solution to rising healthcare costs. Employers can, however, help employees understand their benefits and the importance of preventive care and early detection. As banks plan for 2027, pairing thoughtful benefits planning with clear employee education offers a practical path forward—one that supports employee health while keeping long-term affordability in focus.