Health insurance premiums set for biggest jump in 24 years

Hold onto your wallets: Employer-sponsored health insurance plans are expected to cost 8.2% more on average in 2027 -- the largest yearly spike since 2003 -- with workers expected to pay for part of the increase.

That number comes from an annual survey of 1,800 U.S. employers who sponsor health plans by Marsh, a consulting firm. The 8.2% increase is predicted even with ongoing efforts aimed at cutting healthcare costs, the employers said.

"This year it was almost hard to look -- and yes, it was as bad as we feared, if not worse," Marsh said in a statement announcing the results of the survey.

Due to surging expenses, 59% of employers surveyed nationwide also plan to make new cost-cutting changes to health benefits for their employees in 2027, including higher deductibles, Marsh said.

Among the factors blamed for the rise in benefit costs was the expanded use of pricey GLP-1 drugs for weight loss -- which means more cuts in coverage for the medications.

"Rising GLP-1 utilization accounts for a full percentage point of the overall cost growth for 2027," Marsh said. "While the market for these medications is evolving in ways that could ultimately result in lower costs, some employers needing immediate cost relief chose to drop this coverage for next year."

Doctor's increasing use of AI-enabled software has also resulted in more claims and more expensive claims against insurance plans, further driving up costs, Marsh said.

Citing the same general list of factors, Connecticut insurers earlier this month won double-digit increases in rates for health plans under the state's Access Health exchange for 2027. Although the insurance department trimmed back the insurers' rate requests, individuals will still pay 11.3% more for premiums and small groups will pay 15.1% more next year.

The higher Access Health rates will impact about 220,000 Connecticut residents, or about 6% of the population, at current enrollment levels. Open enrollment for the state's exchange for 2027 begins on Oct. 23, with fewer people expected to sign up as premiums rise.

By contrast, about 59% of Connecticut residents were enrolled in employer-sponsored plans as of 2024, according to U.S. Census estimates.

The cost of healthcare is rising too fast to hold off higher insurance premiums, state Sen. Jorge Cabrera, D-Hamden, said in a statement last week in response to the new Access Health CT rates.

As a solution, Cabrera and other Democrats are advocating for the Connecticut Option, a proposal for universal health coverage currently under review by the state's Office of Policy and Management.

"The existing system is obviously broken, so it's time for a new system," Cabrera said.

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