Another Healthcare Increase Is Coming. Are Employers Watching the Spending Closely Enough?

As 2027 benefit costs climb and workers absorb more of the expense, Vxtra Health founder Larry Hightower says employers need more timely visibility into the claims, contracts and pricing patterns driving their healthcare spending.

ATLANTA, Oct. 12, 2026 /PRNewswire/ -- Employers are preparing for another year of healthcare increases despite efforts to contain them. Marsh projects average employer health benefit costs will rise 8.2% in 2027, the highest increase since 2003, even after planned cost-reduction measures. Without those actions, employers anticipate an 11% increase, while about two-thirds of large employers expect workers to absorb a greater share of premium costs. Those strategies may reduce the increase an employer absorbs directly, but they do not explain what produced the higher renewal in the first place.

For Larry Hightower, founder and CEO of Vxtra Health, that visibility problem develops throughout the plan year. Claims accumulate as employees receive care, contract terms influence how those claims are priced, and employers may receive only periodic information about what is happening. That leaves finance and benefits leaders trying to understand one of the company's major expenses after much of the money has been committed, limiting their ability to understand spending as it develops. "That is not what happens in today's world," Hightower said. "All the old systems are transaction systems. They're not analytics."

Healthcare Costs Reach Beyond the Benefits Budget

Employees at smaller companies are already carrying a larger share of healthcare costs. KFF found that workers with family coverage at firms with 10 to 199 employees contributed an average of $8,889 toward premiums in 2025, compared with $6,227 at larger firms.

For smaller employers, Hightower said uncertainty over healthcare spending can affect decisions beyond the benefits budget, including hiring and compensation. "What happens is they don't make any decisions until they understand what's happening with their employee benefits," Hightower said. "In the case of this year, they delay hiring decisions, they don't give promotions."

That turns healthcare visibility into a broader operating issue. An employer that reaches renewal with a higher number, but little understanding of how the spending developed has fewer opportunities to investigate the claims, pricing patterns, or contract terms that contributed to the result.

Claims and Contracts Shape the Bill Before Renewal

Hightower says understanding healthcare spending requires looking beyond the renewal number to the records underneath it. Historical claims can show where money went, while third-party administrator or administrative services only agreements, provider-network contracts, and health-system agreements can help explain the terms under which those claims were paid. He said reviewing those records together can help employers identify costs and patterns that warrant closer examination.

Smaller self-funded employers often purchase stop-loss insurance to protect against unusually large claims. Hightower said stop-loss carriers also look at the employer's broader claims exposure when determining how to price that protection. "If the stop-loss carrier doesn't have accurate data to manage their exposure to a large catastrophic claim, they're going to price the market higher in order to protect themselves," Hightower said.

That makes timely information useful for more than explaining what has already happened. It can give employers a better basis for understanding where spending is developing during the year and which areas deserve scrutiny before the next renewal.

Hightower compares the level of visibility employers should expect from their health plan with what executives already have for other major financial accounts. A CFO can see yesterday's banking or credit-card activity almost immediately, he said, while information about healthcare spending may arrive only every 90 days or six months.

Visibility Has to Lead to a Decision

More frequent information only matters if someone can interpret it while there is time to respond. Claims and pharmacy activity can reveal where spending is developing, but that information has to reach the people responsible for coordinating care and managing the plan before the year is over.

Under Vxtra Health's model, VxtraCARE nurses would serve as what Hightower calls "orchestrators" around the physician's decision-making. Pharmacy claims provide one example. Through Vxtra's partnership with Judi Rx, prescription activity can become visible shortly after a transaction is adjudicated, giving the care team information they can use to coordinate resources around the physician and patient. "We do not interfere with the decision of the physician," Hightower said. "We orchestrate the resources around the physician's decision making."

For Hightower, that is the value of seeing healthcare spending sooner. Employers can investigate what drives costs, identify issues that demand attention, and respond during the plan year instead of learning the full financial impact when the next renewal arrives. "Transparency is only as good as the infrastructure that you can leverage and the commitment to leverage it," Hightower said.

About Vxtra Health
Vxtra Health is a healthcare operating company serving self-insured, middle-market employers. Through its Managing Operating Partner (MOP) model, Vxtra Health integrates physician leadership, pharmacy management, claims administration, care navigation and healthcare analytics into a coordinated operating system. The company focuses on secondary markets, where local physician relationships, transparent data and aligned incentives can be used to help employers make more informed healthcare purchasing and care-management decisions. Vxtra Health's model is designed to give employers greater visibility into healthcare spending while restoring physicians to a more active role in how care is coordinated. For more information, visit Vxtra Health.

References

• Marsh. (2026, September 2). Employers expect health benefit costs to jump 8.2% in 2027, and the impact will likely be felt by workers, according to Marsh. www.mercer.com/en-us/about/newsroom/employers-expect-health-benefit-costs-to-jump-in-2027/
• KFF. (2025, October 22). 2025 employer health benefits survey.
  kff.org/health-costs/2025-employer-health-benefits-survey/

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SOURCE Vxtra Health