Employers Expect Health Costs to Jump 8.2 Percent in 2027, the Biggest Increase Since 2003. Mercer's Own Fix List Names Direct Primary Care.

Industry News by DPC Insider — Market Desk
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Sources: Employers Expect Health Benefit Costs to Jump 8.2% in 2027, and the Impact Will Likely Be Felt by Workers, According to Marsh (Business Wire, September 2, 2026) · Employers are shifting health care costs to employees but also leveraging new approaches to minimize impact (Mercer newsroom) · Survey: Health benefit costs expected to jump 8.2% in 2027, the biggest increase since 2003 (Mercer) · Three key focus areas for smarter 2027 health benefits planning (Mercer) · Employers plan to shift more health costs to employees (Healthcare Dive) · Treasury, IRS provide guidance on new tax benefits for HSA participants under the One Big Beautiful Bill (Notice 2026-5) · 26 U.S.C. § 223 — Health savings accounts (as amended by Pub. L. 119-21, § 71308) · STATE OF DIRECT PRIMARY CARE — DPCA Member Insights Committee, 2026

Mercer asked more than 1,800 employers what their health benefits will cost next year. The answer, released September 2, was 8.2 percent more per employee in 2027, the steepest one-year jump since 2003.

That figure is the number after employers do something about it. Left alone, Mercer reports, the plans those employers run today would cost about 11 percent more next year. The gap between 11 and 8.2 is the whole benefits industry working.

The Familiar Move Comes First

Fifty-nine percent of employers say they’ll make cost-cutting changes to health benefits in 2027, and plan design changes like higher deductibles are on that list. About two thirds of employers with 500 or more workers expect to raise the employee share of premium, which Mercer says will leave many employees watching their paycheck deductions rise by more than the overall 8.2 percent average.

Mercer attributes roughly one percentage point of the 2027 increase to growing use of GLP-1 drugs for weight management. Two of the other drivers it names are less predictable: wider use of AI-enabled physician software that has pushed more claims and higher-level claims into payers, and payouts under the No Surprises Act dispute process running ahead of expectations.

Mercer had made the same point in June, when it released a separate Survey on Health and Benefit Strategies for 2027. “Employers are under intense pressure to manage another year of elevated health benefit cost growth, but they also know that affordability matters deeply to employees,” said Simon Camaj, Mercer’s US Health Leader.

Read that as a consultancy telling clients the deductible lever has a floor under it.

The Other List Mercer Publishes

Back in January, well before the cost projection landed, Mercer published a client-facing piece on planning for 2027 built around three focus areas. Cost drivers open the piece. The third area, on access to care, leads with making access to low-cost primary care as easy as possible, and it names four ways to get there: telehealth, an on-site or near-site clinic, a direct primary care plan or waiving copays for primary care visits.

A direct primary care plan, named in a Mercer sentence, sitting between a near-site clinic and a copay waiver as one ordinary option among four.

That is a real marker of where the model sits in 2026. It is also thinner than it looks. Mercer’s preliminary release carries no adoption number for DPC, no count of employers that bought one and no cost result from the ones that did. Being third on a list of four is placement, and placement is what a consultancy hands a client before anyone signs anything.

The nearest number comes from that June survey rather than the September release: 31 percent of large employers offer or plan to offer at least one non-traditional medical plan in 2027, such as a high-performance network or a variable copay design, with another 38 percent considering one. Those are steering strategies, and DPC is a steering strategy with an unusually short path between the member and the physician.

Higher Deductibles Meet the January HSA Rule

The thing that changed under everyone’s feet this year has nothing to do with Mercer.

A raised deductible is not automatically a high-deductible health plan in the sense that matters here. That term is defined in § 223 with its own minimum thresholds, and a plan qualifies only by clearing them. Until this January, though, a worker whose plan did qualify still had a problem: paying a monthly fee for primary care access could disqualify them from contributing to a health savings account at all.

The One Big Beautiful Bill Act amended 26 U.S.C. § 223, and as of January 1 a worker on a qualifying high-deductible plan can pay direct primary care fees from an HSA and keep contributing to it. Treasury and IRS guidance in Notice 2026-5 set out how the arrangement has to be built. The fee ceiling is $150 a month for one person and $300 a month for an arrangement covering more than one, with inflation adjustments after 2026.

Every membership price the trade group publishes sits well under that ceiling. The DPC Alliance’s State of Direct Primary Care report, published in 2026 on survey responses collected in October 2024, puts every reported monthly figure between roughly $78 and $114, urban or rural, new practice or mature one. Those are category averages rather than a distribution, so they say nothing about how many individual practices charge above $150. Pricing still varies by practice and by location, and that data predates the cap taking effect.

So the cost-shifting move and the DPC membership now sit on the same side of the tax code. Whether the 2027 deductible increases actually push more plans over the § 223 thresholds is a question Mercer’s release doesn’t take up, and no source here answers it. If they do, the same move that raises a worker’s out-of-pocket exposure also enlarges the population for whom a DPC membership is a tax-advantaged purchase.

Two different mechanisms are running here and they’re easy to blur. The HSA route is a worker buying their own membership. Mercer’s list item is an employer buying a DPC arrangement for a population. Both got easier in 2026, for unrelated reasons, and only the first one has a statute behind it.

Where DPC Fits

If you’re a physician deciding whether employer contracts are worth chasing, the useful read on 8.2 percent is that it buys you a meeting, not a deal.

DPC arrives on that list third, under telehealth and an on-site or near-site clinic. Both of those come with vendors who know how to answer a request for proposal. A solo practice with 400 members starts from further back. What DPC has is the shortest distance between a monthly fee and a physician who answers, which is the thing the other three options approximate at greater expense.

None of this establishes that DPC lowers an employer’s total plan cost, and Mercer makes no such claim. The 8.2 percent projection is a projection, gathered from employers still mid-budget as of August 10, and preliminary survey results move. What it does is set the temperature in the room where these conversations happen through the 2027 plan year. Cheap primary care access got put at the top of a Mercer list because expensive everything else left no other place to look.