Understanding The 2027

Group Medical Landscape

A Client Guide to Market Trends, Carrier Dynamics, and Your Renewal

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.

BBSI is here to help you navigate this evolving landscape with confidence. Our teams work alongside you to develop smart contribution strategies and deliver the insights you need to drive a competitive benefits offering — for your business, your employees, and their families.

Download a Copy of this Guide

Key Drivers of Rising Costs	Key Drivers of Rising Costs
17-year high medical trend: The underlying cost of care is increasing faster than it has in nearly two decades. Prescription drug costs outpacing medical trend: Specialty medications and GLP-1 drugs continue to be major pharmacy cost drivers. Chronic condition costs: Managing conditions such as diabetes, heart disease, and obesity continues to become more expensive. What This Means for Employers Nationally, insurers' proposed 2027 small-group rate filings reflect these pressures, with increases averaging approximately 15% in many markets.	Client-specific renewal review: Each client’s annual renewal rate reflects insurance trends, recurring high-cost claims, risk changes, and healthcare usage patterns. Carrier partnership: BBSI works directly with carriers to pursue competitive, sustainable renewal outcomes. Employee education: helping your workforce use preventive care and the right care setting reduces costs over time.

Key Drivers of Rising Costs

17-year high medical trend: The underlying cost of care is increasing faster than it has in nearly two decades.

Prescription drug costs outpacing medical trend: Specialty medications and GLP-1 drugs continue to be major pharmacy cost drivers.

Chronic condition costs: Managing conditions such as diabetes, heart disease, and obesity continues to become more expensive.

What This Means for Employers Nationally, insurers' proposed 2027 small-group rate filings reflect these pressures, with increases averaging approximately 15% in many markets.

Client-specific renewal review: Each client’s annual renewal rate reflects insurance trends, recurring high-cost claims, risk changes, and healthcare usage patterns.

Carrier partnership: BBSI works directly with carriers to pursue competitive, sustainable renewal outcomes.

Employee education: helping your workforce use preventive care and the right care setting reduces costs over time.

Sources: KFF, “How Much and Why Premiums Are Going Up for Small Businesses in 2027” (Aug. 2026); PwC Health Research Institute, “Behind the Numbers 2027” (June 2026); Segal, “2027 Health Plan Cost Trend Survey” (July 2026).

Why this matters.

A national trend figure shows where the market is heading — it does not determine your renewal. BBSI renewals remain client specific.

Understanding Trend vs. Renewal

Trend forecasts per-member claim cost increases 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 move higher or lower 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.

Insurance Carrier Trends

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 BBSI's Approach Differs

BBSI tailors benefits strategy to each organization’s needs rather than applying a one-size-fits-all 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.

Pharmacy and GLP-1 Medications

Prescription drug trend is projected above medical trend again in 2027. Few decisions move pharmacy costs more than how a plan covers GLP-1 medications* — a drug class (including Ozempic®, Wegovy®, and Mounjaro®) originally for diabetes, now widely prescribed for weight loss. Specialty drugs, a separate high-cost category for conditions like cancer and rheumatoid arthritis, are also a growing share of spend.

Sources: Segal, “2027 Health Plan Cost Trend Survey” (July 2026); Segal SHAPE data (a large database of employer health-plan claims); PwC, “Behind the Numbers 2027” (June 2026). AOM stands for “Anti-Obesity Medication”

What good pharmacy plan design looks like:

Eligibility & Prior Authorization Clear criteria for who qualifies, confirmed before approval and periodically after. Lifestyle Support & Duration Management Pairing medication with coaching and monitoring how long members stay on therapy. 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: 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. 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. 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.

BE HEALTHY | BE PREVENTIVE | BE INFORMED | USE THE RIGHT CARE | FOLLOW YOUR CARE PLAN

Source Documentation

Every figure in this guide comes from independent, third-party research.

KFF — “How Much and Why Premiums Are Going Up for Small Businesses in 2027” (Aug. 6, 2026)

Median proposed small-group premium increase of 14%, based on 295 insurer rate filings across all 50 states and D.C.

PwC Health Research Institute — “Medical Cost Trend: Behind the Numbers 2027” (June 11, 2026)

2027 group medical cost trend projected at 9%, the highest in 17 years: based on interviews with actuaries at 27 U.S. health plans covering 103M+ members.

Segal — “2027 Health Plan Cost Trend Survey” (July 23, 2026, 30th annual survey)

Rx trend projected at 11.5%, specialty drug trend at 11.9%; GLP-1 experience data from Segal’s SHAPE claims database.

© 2026 Barrett Business Services, Inc. (BBSI). All rights reserved. This communication is for informational purposes only, is not legal, tax, actuarial, or accounting advice, and is not an offer to sell, buy, or procure insurance. Figures reflect national projections current as of mid-to-late 2026 and are provided as market context only. Do not disregard professional advice or delay seeking it because of something read here.

Note: Weight-loss-specific medications may be excluded from your BBSI policy. *GLP-1 drugs may be covered for diabetes or diabetes in conjunction with an underlying health condition, dependent on plan or carrier.