We are in summer which means the benefit consultants are beginning to estimate medical cost increases for 2027 and health plans are working on the accompanying premium increases. PriceWaterhouseCooper is the first to release a report on expectations for 2027 and they are not good. PWC estimates that medical costs will be up by a painfully high 9% in 2027. It list five factors behind this sharp increase. One is that use of artificial intelligence tools will allow providers to drive their already high bills up even higher. Provider consolidation and general inflation is the second, followed by drug costs, more mental health utilization and the No Surprises Act being used by providers to get out-of-network reimbursement. I don’t care what the report says, or a recent poll in which respondents blamed insurance companies; 100% of the excessive medical cost increases in the last few years have been due to hospitals with outrageous prices, accompanied by excessive management compensation, and high drug prices, driven by a warped patent system. I would also note that mental health claims are fertile ground for provider fraud and abuse. (PWC Report)
Consumers and employers will howl about this increase but it won’t matter, Congress is too gutless to take the tough steps required to bring prices down. Wouldn’t want to piss off those big contributors in the hospital systems and drug companies.
