Lisa Miller Client Service Practice Leader View Bio

PwC’s annual medical trend report projects the commercial healthcare cost trend will hit 9% in 2027, the highest level in 17 years, up from the 8.5% that has held steady for several years. The report, based on surveys of actuaries from 27 U.S. health plans covering more than 103 million employer-sponsored members, points to artificial intelligence (AI)-enabled billing and coding tools as a major new inflator, alongside provider reimbursement pressure, rising pharmacy costs from specialty drugs and GLP-1 use, surging behavioral health utilization and a reimbursement process (No Surprises Act arbitration) that increasingly favors providers.

Traditional deflators like biosimilars, generics and site-of-care shifts are still in play, but PwC notes they’re now baked into the baseline and no longer enough to offset the upward trend. Federal policy changes affecting Medicaid and Affordable Care Act marketplace subsidies add further uncertainty, with ripple effects likely to reach hospitals and drug manufacturers even before impacts show up in employer costs directly.

For employers, a 9% trend calls for a proactive strategy rather than a wait-and-see approach. Plan sponsors can evaluate levers like high-performance networks, centers of excellence, pharmacy carve-outs and stronger utilization management now, before AI-driven coding, behavioral health demand and potential Medicaid cost-shifting further narrow their options. Contact us for more information.