Early Look at What’s Ahead for 2027: Trends to Watch

November 12, 2026 Sue Riordan

Our teams keep a watchful eye on trends and insights that impact the self-funded community and employers we serve. From continued cost pressures to helping members access high-quality care, here’s an early look at what’s ahead for 2027 and the trends to watch.

Cost pressures not expected to ease up

For employers and employees hoping for a break from the effects of inflation, 2027 isn’t expected to offer much relief. According to PwC, medical cost trend is projected to reach nine percent, the highest level in almost two decades¹. Several factors will contribute to this period of elevated growth, including higher hospital and facility costs, continued growth in pharmacy costs and a steady rise in behavioral health utilization.

Pharmacy costs are expected to keep outpacing overall medical trend by a few percentage points. That growth is fueled largely by high-cost therapies, including GLP-1s, oncology treatments and other specialty medications. On a positive note, pharmaceutical advancements are changing how some complex conditions are treated. New drug therapies can even replace or lower the need for invasive procedures in some cases. While these innovations can improve outcomes for patients, they don’t always translate into lower overall costs

Self-funding remains top choice for big employers

Self-funding remains the dominant model for large employers in 2027. It’s seeing increased interest among small and midsize employers as well. About 74 percent of firms with 500 or more employees are self-insured, with an average of 80 percent of employees currently enrolled in a self-funded plan. Among smaller employers, between 30 and 40 percent are self-funded. In particular, small employers, including those with as few as 10 employees and those with fewer than 200, are also choosing the self-funded model. Reasons include cost savings and a desire for greater flexibility in choosing targeted programs.

Chronic conditions grow among younger populations

Millennials, or those roughly between the ages of 30 and 45, make up about one-third of the working population today. Studies show approximately 44 percent of millennials are living with at least one chronic condition². This age group is also visiting the emergency room more often and seeing their primary care physicians (PCPs) less frequently than other generations.

Conditions impacting this age group include type 2 diabetes, high blood pressure, obesity and mental health conditions such as anxiety and depression. With this in mind, employers may want to consider chronic condition management strategies that can help employees identify risks earlier and manage conditions more effectively.

Primary care is a lever worth pulling

Members who see their PCP regularly tend to use the emergency room less, have fewer avoidable hospital admissions and have better medication adherence. But what’s really interesting about primary care is the influence it has on overall health and overall spending. That’s because primary physicians play an important role in guiding what happens next. Decisions about screenings, diagnostic tests, specialist referrals and prescriptions can all affect care and costs later on. It’s even estimated that every one dollar spent on primary care can generate up to $13 in savings, certainly making primary care an investment worth thinking about3.

Quality of care comes into sharp focus

As costs go up, employers are increasingly looking for ways to influence not just the type of care but also care quality. Both quality and site of care can help prevent complications, limit disease progression and reduce avoidable readmissions.

In 2027, employers may look to benefit design to help guide members toward high-value care. Alternative health plan models can play a role in this. More employers could also seek to implement Centers of Excellence (84 percent of large employers have already or plan to implement COEs in 2026). When it comes to quality care, making informed decisions up front can help improve outcomes and deliver greater value across the health care journey.

Prepping for what’s ahead

This year has seen a number of challenges impacting employers and the benefits industry. We hope this early look at what’s ahead for 2027 gives you helpful insights into the trends to watch in the coming year. We look forward to supporting our clients and members in the year ahead.

This material is for information only and is not an offer or invitation to contract. Health benefits and health insurance plans contain exclusions and limitations. Plan features and availability may vary and are subject to change. This information is not intended as medical advice.

Sources

¹https://www.pwc.com/us/en/industries/health-industries/library/behind-the-numbers.html

² cdc.gov

³www.nachc.org/the-nations-biggest-healthcare-challenge

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