Matthew Johnson, who heads Portland-based Precision NW Electric, watched the monthly cost of covering just one of his roughly 10 electricians climb from about $440 to what would have been around $541 in 2026 had the company stuck with its old plan. That kind of jump is becoming the norm rather than the exception, and employers nationwide are now bracing for what could be the steepest healthcare cost increase in more than a decade heading into 2027.
Even after employers make changes to their benefit offerings, they still expect healthcare costs to rise about 8% in 2027, according to reporting by OregonLive. Without any changes to their health plans at all, that figure climbs to just over 9%. The Business Group on Health, which surveyed large employers on healthcare and benefits trends, found that employers have now spent more on healthcare than they forecast for three straight years running.
Johnson told the outlet that rising healthcare costs make it harder to increase wages for his workers, and that the company has had to charge more for billable hours just to cover health insurance. He said the health plan Precision NW Electric previously carried had a really high deductible and out-of-pocket maximum, a combination that pushed the company to switch to a level-funded health plan that places more financial risk on the business itself for employees' medical bills. That kind of hybrid funding arrangement, which can offer lower costs and more monthly predictability, has become increasingly common among small employers nationwide, with adoption among firms of 10 to 199 workers reaching 37% in 2025, up from just 6% in 2018, according to KFF.
A Decade of Doubling Premiums
The numbers behind Precision NW Electric's experience mirror a broader pattern across Oregon. A worker with single coverage in the state paid about $850 in annual premiums in 2010; by 2025, that figure had risen to roughly $1,500, a 78% increase. Family coverage premiums moved even more dramatically, nearly doubling between 2010 and 2025, with a worker's annual contribution rising from about $3,900 to nearly $9,400 over that span, per the same reporting.
Nationally, the average annual premium for employer-sponsored family health insurance reached $26,993 in 2025, with workers contributing an average of $6,850 out of their own paychecks toward that cost, according to KFF. Family premiums rose 6% in 2025 following a 7% increase the year before. Overall, healthcare costs will have risen 76% from 2018 through 2027, roughly twice as fast as the broader consumer price index, which rose about 48% between 2010 and 2025.
Precision NW Electric contributes toward family coverage and also offers dental and vision insurance, but the pressure of rising costs has real effects on employees' willingness to seek care. The company's report notes one employee who received a root canal only after previously putting it off, and another who visited a dentist for the first time in eight years — the kind of deferred care that becomes more common as out-of-pocket costs climb.
Prescription Drugs and GLP-1s Driving Costs
Prescription drugs now account for about one-quarter of employers' overall healthcare spending, and pharmacy costs are projected to rise 12% in 2027 before any interventions, per Pharmaphorum. Much of that pressure traces back to specialty therapies and surging use of GLP-1 weight-loss medications, which often cost more than $1,000 per month per employee. The high price tag has already pushed some employers to pull back: the share of large employers covering GLP-1 drugs specifically for weight loss fell from 72% in 2025 to 60% in 2026, according to Insurance Business.
The trade-offs are not simple. Modeling from the Employee Benefit Research Institute indicates that broad GLP-1 coverage can raise employer health premiums by anywhere from 6% to nearly 14% annually, even though separate Aon research has found long-term medical cost reductions of 3% to 9% among adherent users, as reported by SHRM. GLP-1 utilization has more than tripled since 2020, leaving employers to weigh short-term budget strain against potential long-term savings.
To manage prescription costs, employers are promoting lower-cost drug alternatives, tightening coverage rules and changing how they purchase medications, per the OregonLive report. Some are turning to companies like Sharx, which helps self-insured employers obtain certain expensive drugs outside traditional pharmacy benefits; the outlet notes that savings from that approach depend on the specific drug and health plan involved. More than half of employers surveyed also said they plan to eliminate underperforming healthcare vendors, and nearly all — 84% — expect to offer at least one center of excellence, a designated high-quality provider network, by 2027, encouraging workers toward selected providers through lower out-of-pocket costs or other incentives.
Oregon's Regulatory Limits
Oregon does have a mechanism meant to keep healthcare spending growth in check. The state's Sustainable Health Care Cost Growth Target program, created under Oregon Revised Statute 442.385, sets an annual spending growth benchmark for payers and providers — recently adjusted from 3.4% for 2021 through 2025 up to 3.75% for 2026 through 2030, according to the Oregon Health Authority. Yet total Oregon healthcare spending reached $10,302 per person in 2023, growing 5.2% year-over-year and exceeding the state's benchmark target in four of the previous five measurement periods, with price increases — rather than how much care people actually use — identified as the primary driver of that growth.
State officials are also targeting drug prices directly. The Oregon Prescription Drug Affordability Board selected several high-cost medications, including Ozempic, Mounjaro and Jardiance, for formal affordability reviews in 2026, according to the Oregon Department of Consumer and Business Services. The board reports its findings annually to the Oregon Legislature to help evaluate the financial burden these drugs place on consumers. Still, as Hoodline has previously reported, roughly 72% of Oregon's roughly 60 hospitals operate in highly concentrated markets or as local monopolies, giving consolidated health systems significant leverage to negotiate higher reimbursement rates from commercial insurers — a structural pressure that largely sits outside the reach of state spending targets.
Workers Feel the Squeeze
Precision NW Electric's health plan costs have increased roughly 20% annually, though Johnson noted that comparable medical coverage under the company's new plan costs about 11% less than its previous one. He also said premiums could still rise if the company has an unhealthy year with many employees getting sick, and that employee contributions may be tied to salaries so that lower-paid workers pay less. More than half of workers with employer coverage were enrolled in high-deductible health plans in 2024, according to a federal-data analysis cited in the report, and employers on average expect to cover only about 80% of healthcare bills.
The financial strain is showing up in how people live their lives, not just how they budget. Nearly 30% of insured U.S. adults reported financial trade-offs from healthcare costs, per a Gallup survey, and about one-third of U.S. adults said they had cut other spending to cover healthcare or medicine, according to a West Health-Gallup survey. Eighteen percent of U.S. adults said they had put off changing jobs because of healthcare costs, 14% delayed buying a home, and nearly one in 10 postponed retirement, all per Gallup survey data. Higher healthcare spending, as Johnson's experience shows, also leaves less money available for raises and other expenses — a dynamic playing out at small businesses across Portland and beyond as the 2027 cost increases take shape.
