Healthcare costs continue to rise nationally, driven by inflation, clinical workforce shortages, increased utilization of care, and the rapid emergence of new treatments, therapies, and technology. These pressures are reshaping how employers plan for benefits — and why the right guidance matters more than ever.
What Are the Key Drivers of Rising Costs for the 2027 Plan Year?
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17-year high medical trend: The underlying cost of care is increasing faster than it has in nearly two decades.
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Prescription drug costs outpacing medical trend: Prescription drug costs are projected to rise faster than medical costs again in 2027, driven by GLP-1 medications* and specialty drugs for conditions such as cancer and rheumatoid arthritis. How your plan covers GLP-1s can significantly affect pharmacy spending.
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Chronic condition costs: Managing conditions such as diabetes, heart disease, and obesity continues to become more expensive.
What Do These Numbers Mean for Employers?
These cost pressures are reflected in insurers’ proposed 2027 small-group rates, with increases averaging about 15% in many markets nationwide.
However, this national trend simply shows where the market is heading. It does not determine your renewal, and at BBSI, every renewal is client-specific.
How Does BBSI Help Manage Rising Costs During Renewal Season?
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Client-specific renewal review: Each client’s annual renewal rate reflects insurance trends, recurring high-cost claims, risk changes, and healthcare usage patterns.
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Carrier partnership: BBSI works directly with carriers to pursue competitive, sustainable renewal outcomes.
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Employee education: BBSI helps your workforce use preventive care, and the right care setting reduces costs over time.
What is the Difference Between a Benefits Trend & Renewal?
"Trend" forecasts how much claims costs per member are expected to rise based on medical inflation, provider price hikes, and new treatments or technology. However, trend estimates and your actual "renewal" are not always equal — renewal rates may also adjust for your plan’s own claims, regional differences, and plan design changes.
- Even with a 9% national medical cost trend, your renewal could increase or decrease depending on your plan’s own experience — especially for smaller groups, where results are naturally less predictable.
- Renewals reflect regional, regulatory, and carrier-specific differences, not just the national headline number.
How Do Insurance Carriers Set Rates?
Insurance carriers set their own pricing based on national and regional healthcare patterns, state mandates, and cost data. These factors shape your options, but BBSI works directly with carrier partners to pursue competitive renewals for clients.
How Does BBSI Differ From Other Insurance Carriers?
BBSI tailors benefits strategy to each organization’s needs rather than applying a one-size-fits-all market trend. Renewal rates are set annually per client, factoring in your claims history, ongoing high-cost risk, and utilization patterns such as preventive care and chronic condition management.
What Does a Good Pharmacy Plan Design Look Like?
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Eligibility & Prior Authorization: Clear criteria for who qualifies, confirmed before approval and periodically after.
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Lifestyle Support & Duration Management: Pairing medication with coaching and monitoring how long members stay on therapy.
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Biosimilars: Lower-cost, clinically equivalent alternatives to brand-name biologic drugs, used where appropriate.
5 Ways To Get The Most From Your Health Plan
Small, informed choices can support your health and help keep coverage more affordable for everyone.
1. Use Preventive Care
Schedule annual checkups, recommended screenings, and vaccinations.
Why it matters: Staying on top of preventive care and recommended screenings can help detect health issues earlier, which may improve outcomes and help avoid more costly care later.
The value of preventive care, by the numbers:
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Chronic disease drives cost: 90% of the nation’s $5.3 trillion in annual U.S. health care spending goes toward people with chronic and mental health conditions, many of which benefit from early detection and routine management.
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Cancer death rates are falling: The U.S. cancer death rate has dropped 34% since 1991, helping avoid an estimated 4.8 million deaths — a trend attributed to reduced smoking, improved treatment, and greater use of early detection screening.
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Survival is improving: The five-year survival rate across all cancers combined has reached 70% for patients diagnosed 2015–2021, up from about 50% in the mid-1970s, reflecting decades of progress in early detection and treatment.
2. Choose the Right Care Setting
Whenever possible, use in-network providers and consider the most appropriate care setting for your needs, whether that is primary care, virtual care, urgent care, and reserve the emergency room for true emergencies.
Why it matters: Using in-network providers and selecting the appropriate care setting can help lower out-of-pocket costs. For many minor illnesses and injuries, virtual care or a convenience care clinic may provide a faster, lower-cost alternative to the emergency room.
3. Manage Ongoing Conditions
Follow your care plan, take medications as directed, and keep routine appointments for chronic conditions.
Why it matters: Unmanaged chronic conditions often lead to more complex and costly care. Following your treatment plan may help reduce complications, avoidable hospital visits, and long-term health care costs.
4. Build Healthy Daily Habits
Stay active, eat well, get enough sleep, manage stress, and avoid tobacco.
Why it matters: Maintaining healthy habits may help prevent chronic disease and reduce the need for more costly medical care over time.
5. Make the Most of Your Benefits
Take time to understand your health plan, including covered services, prescription benefits, wellness programs, virtual care options, and available support resources. Review your carrier's website or mobile app to learn about the tools and programs available to you.
Why it matters: Understanding your benefits helps you make informed healthcare decisions, use available resources effectively, and avoid unnecessary out-of-pocket costs.
Quick Summary
The "Healthcare Trends: Understanding the 2027 Group Medical Landscape" guide explains the key factors driving healthcare costs in 2027, including rising medical expenses, prescription drug costs, chronic conditions, and increased utilization. It also explores how these trends can affect employer health plan renewals, how BBSI approaches benefits strategy and carrier negotiations, and practical ways employers and employees can help manage healthcare costs.
