American companies are predicting their healthcare costs will rise by a median of 9.2 percent in 2027, and they are already pulling back on coverage of GLP-1 weight-loss drugs as a direct response to pharmacy spending that has grown faster than any other component of their healthcare budgets.
The projections come from the Business Group on Health’s 2027 Employer Healthcare Strategy Survey, a major annual healthcare benchmark, released on Aug. 25. Companies expect a median cost increase of 8.5 percent in 2026, with potential mitigation through plan design changes bringing that figure down to approximately 7 percent. The 2027 healthcare forecast of 9.2 percent could be reduced to around 8 percent through similar benefit adjustments.
Pharmacy costs now account for approximately 25 percent of employer spending and are projected to grow by 12 percent in 2026. GLP-1 medications, which include popular weight-loss and diabetes drugs, are a primary driver of that pharmacy cost surge.
The GLP-1 coverage pullback
The survey found that 60 percent of employers are covering GLP-1 drugs in their healthcare plans for obesity treatment in 2026, down from 72 percent in 2025. That 12-percentage-point drop in a single year reflects a significant reversal in employer coverage decisions and suggests the trend is likely to continue as long as pharmacy costs remain elevated.
For the millions of Americans who gained access to these medications through employer insurance, the shift could mean losing coverage for drugs that have transformed how obesity is treated clinically. GLP-1 medications work by mimicking hormones that regulate appetite and blood sugar, producing sustained weight loss in a way that diet and exercise programs alone frequently cannot achieve.
The decision to reduce coverage falls disproportionately on lower-income workers and those with fewer options, who are more likely to depend on their workplace plan for access to specialty medications. Private-pay GLP-1 prices without insurance can exceed $1,000 per month, placing them out of reach for most working families.
What employers are doing instead
Beyond reducing GLP-1 coverage, companies in the survey reported encouraging the use of lower-cost alternatives to specialty drugs and implementing more active management of pharmacy benefit plans to identify and redirect spending.
The strategies being considered include requiring prior authorization steps before covering high-cost medications, limiting coverage to specific diagnoses, requiring patients to demonstrate they have tried lower-cost interventions first, and moving toward value-based arrangements with pharmacy benefit managers.
The racial equity dimension
Black Americans have higher rates of obesity than the national average, driven by a combination of genetic factors, the health effects of chronic stress, food environment disparities and limited access to preventive care. GLP-1 medications represent a potential tool for addressing obesity-related conditions that disproportionately affect Black communities, including heart disease, type 2 diabetes and kidney disease.
If coverage of GLP-1 drugs continues to decline, the populations most likely to lose access are those who were already least likely to afford these medications out of pocket. The cost containment choices being made at the corporate level will have downstream effects on health outcomes in communities that can least afford those consequences.
What to watch for
The Business Group on Health survey represents large companies, generally those with more than 500 employees, and their coverage decisions influence the broader market. If major employers continue pulling back on GLP-1 healthcare coverage for weight management while maintaining it for diabetes, the practical effect will be a tiered access system where the same drug is available or unavailable based on the diagnostic code attached to the prescription.
