The news: US employers expect healthcare costs to rise 9.2% in 2027 (offset to 8% with plan design changes after an 8.5% estimated increase in 2026, according to a Business Group on Health survey of 127 employers released Tuesday. Actual costs have exceeded employer predictions for three straight years. Compounded, that trend could push cumulative healthcare cost growth to 76% between 2018 and 2027, about double the rate of general inflation, per BGH.

Driving the news: Cancer, heart disease, and musculoskeletal conditions remain the top three drivers of employer healthcare spending. Pharmacy now accounts for 25% of total employer healthcare spending, with employer drug costs estimated to jump 12% in 2026. Rapid growth in GLP-1 use, expanding specialty drug indications, and greater access to cell and gene therapies, are driving that increase, per BGH.

Why it matters: GLP-1s are stacking a new cost burden on top of the chronic conditions that have long accounted for much of employer healthcare spending. Nearly 80% of employers said the drugs are driving up their healthcare costs, according to a prior BGH survey. Use among US adults nearly quadrupled from 3% in 2024 to 11% in 2026, per June Gallup data.

Employers are pulling back coverage of GLP-1s for weight loss, while diabetes coverage holds. About 14% of employers have already dropped or plan to drop obesity drug coverage for US employees in 2027, BGH confirmed with EMARKETER. Even large employers, which have historically offered more generous coverage, are increasingly scaling back weight loss drug coverage, while others require prior authorization or lower-cost treatments first. Some others are starting to subsidize cash-pay options, either through direct-to-consumer platforms or direct employer deals with drugmakers that offer workers discounted prices. Under those arrangements, employees still pay more than they would under full coverage, but less than the standard out-of-pocket cost.

Implications for the weight loss drug market: GLP-1s may be the expense that pushes many employers to further restrict or eliminate coverage of the drug class for weight loss. That puts pharma in a bind: cash-pay prescriptions are surging, but broader GLP-1 adoption still depends on employer coverage that is shrinking under cost pressures. Eli Lilly and Novo Nordisk are responding with direct-to-employer deals that bypass pharmacy benefit managers and look to preserve access, but the strategy is still emerging, and its reach remains limited. In the near term, more consumers will shift to self-pay, pressuring Lilly and Novo to compete more aggressively on price in this channel.

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