U.S. employer healthcare costs are expected to rise 9.5% in 2027, pushing the average cost above $19,000 per employee, driven by increased medical use and spending on high-priced drugs, insurance broker Aon said on Thursday.

Medical spending has climbed as patients use more healthcare services, chronic conditions become more prevalent and the number of high-cost claims increases, Aon said. Healthcare costs for employers are set to rise by near double digits for a fourth straight year in 2027.

Here are some more details:

• Greater use of specialty medicines and GLP-1 treatments for diabetes, obesity and other conditions is adding to prescription-drug costs.

• “Additional cost pressure is emerging as providers adopt technologies, including AI, that support more detailed clinical documentation and coding, contributing to higher billed charges in some instances,” said Aon.

• Employers are expected to cover about 82% of health-plan costs in 2026.

• Their average cost is expected to rise 8.8% this year to $14,432 per employee, while total plan costs increase 8.3% to $17,562.

• Employees are expected to spend an average of $5,297 in 2026, comprising $3,130 in payroll contributions and $2,167 in out-of-pocket expenses, a combined increase of 7.9% from last year.

• Aon based its estimates on data from more than 1,100 U.S. employers covering 7.9 million employees and $135 billion in 2026 healthcare spending.

• The projection assumes employers do not make benefit changes or introduce care-management programs to curb expenses.

• “Aon consultants expect many employers to implement cost-saving changes or programs to help mitigate this increase,” it said.

(Reporting by Puyaan Singh in Bengaluru; Editing by Shilpi Majumdar)