premiums

Employers are bracing for what could be the highest rise in health insurance premiums in 16 years in 2027, driving up the average cost of family coverage in California to more than $30,000 — the price of a new compact car.

Health insurance companies expect the cost of medical services and prescription drugs to soar by 9% in 2027, according to a new survey by PwC, the highest rise the researchers have found since 2011. Insurers use those expected medical costs to calculate the price of premiums in the coming year. Many employers require workers to pay part of that cost.

Experts say the escalating costs of employers’ premiums are reducing workers’ wages and take-home pay, while raising the prices of goods and services in California and across the country.

“It’s going to erode the standard of living for lots of California families,” said Glenn Melnick, a USC professor of healthcare finance.

Melnick said when employers are forced to spend more on health insurance, there is less money available for wages. The skyrocketing premiums, he said, are like a hidden pay cut for working families.

The higher cost also has small-business owners wondering whether they can continue paying for their workers’ health insurance.

Co-owner Camden Avery makes a sale at the Booksmith in San Francisco.

(Josh Edelson / For The Times)

This year, premiums for staff at the Booksmith, an independent bookstore on Haight Street in San Francisco, leaped by 17%, said Christin Evans, the store’s owner. Next year could bring even more pain. The monthly premium for four employees is $3,250.

To try to cope, Evans said, she has reduced staff hours by closing the store earlier.

“We have to absorb it,” she said. “We’re not paying the wages we want to pay or delivering the customer service we’d like to deliver.”

Seventeen million Californians receive health benefits from an employer. Those premiums have been rising faster in California than the national average.

Between 2022 and 2025, the average family premium for employers in the state rose by 24% to $28,397, according to a survey by KFF and the California Healthcare Foundation. That was nearly double the 12.2% increase in consumer prices during those years.

Hospital, pharmaceutical and other medical costs escalated even faster after 2025.

PwC’s annual survey of insurers last year found an expected rise of 8.5% in 2026, which its researchers later revised to 9%.

A key driver of the rising medical costs, according to experts, is prices charged by hospitals. In recent years, some health systems, including UCLA and Cedars-Sinai, have grown larger by buying nearby hospitals and expanding their clinics, becoming more dominant in the community and reducing competition.

Melnick said the expansion of some health systems into giant organizations means that they can “tell insurance companies what the price will be.”

A Cedars-Sinai spokesperson pointed to a 2022 paper that found that for-profit health system prices had escalated faster than those at nonprofit systems like Cedars. The paper was partly funded by Cedars.

“Cedars-Sinai Health System’s growth in recent years has expanded access to the highest levels of patient care and medical innovation across the Los Angeles region,” the spokesperson said.

UCLA did not respond to requests for comment.

Another factor is the rising cost of prescription drugs. Spending on cancer drugs, the most costly category, reached $143 billion in 2025, an annual increase of 12%, the PwC survey found.

The nation’s spending on obesity medicines, including GLP-1 drugs such as Ozempic and Wegovy, soared by 81% last year, PwC said. A 30-day supply of the drugs lists for more than $1,000.

An Ozempic injection pen.

(Christina House / Los Angeles Times)

Gallup said this month that its survey found that 11% of U.S. adults are now taking the GLP-1 drugs for weight loss.

The obesity drug manufacturers say the medicines can reduce medical expenses by preventing other costly conditions such as diabetes and heart disease, but data don’t yet show such reductions, PwC said.

Researchers at the California Healthcare Foundation say a large part of the problem is that hospital operating costs, prescription drug prices and doctor fees have been allowed to grow unchecked for decades.

The foundation estimated in a report last year that 25 cents of every dollar spent in California — more than $73 billion each year — does nothing to help patients. Instead it goes to excessive profits for providers, administrative red tape and other waste, the foundation found.

California employer premiums are expected to rise next year for another reason: Gov. Gavin Newsom and lawmakers agreed in June to raise taxes on the private plans to help pay for the cost of Medi-Cal, which covers the medical costs for the poor, and to help balance the state budget.

The California Assn. of Health Plans said insurers will add the tax to next year’s premiums. The trade group estimates the higher tax will cost each insured person $100 next year or $400 for a family of four.

The higher tax must still be approved by the Trump administration. Republicans in the state Assembly wrote a letter to the administration this month, asking officials to deny the request.

Researchers also expect a jump in premiums for families without employer insurance who purchase policies on state marketplaces such as Covered California. Some of those families faced double-digit increases this year because of rising medical costs and the end of enhanced federal subsidies that Congress had approved as a temporary measure during the pandemic. Almost 400,000 Californians dropped their Obamacare plans this year as prices soared.

To deal with the higher premiums, some employers are changing the design of their health plans to shift more of the cost to workers by raising deductibles and co-pays.

Those higher out-of-pocket costs are just the beginning of the fallout. Twenty-two percent of chief financial officers surveyed by Mercer in February said the high price of health benefits had forced them to stop hiring or led to layoffs. Thirty-six percent of those executives said the rising premium costs have harmed workers’ wages and raises.

Candice Elliott, a human resources consultant in Santa Cruz, said smaller businesses such as restaurants struggle to find ways to cover the higher costs.

Many restaurants, Elliott said, already have a slim margin between their revenues and expenses. When premiums rise, she said, some restaurants have added a fee to the customer bill to help cover workers’ health costs. Others have hiked menu prices.

“That impacts affordability for the consumer,” Elliott said. “It makes inflation greater.”

Some small businesses have moved from so-called silver plans to the lower-priced bronze plans, she said, which cover less of the employee’s monthly premium. “It’s effectively a decrease in pay for the employee,” she said.

Others are hiring employees overseas, Elliott said. “You can pay someone in the global south half of what you pay an American and still afford them a good standard of living and benefits that are unaffordable in the U.S.,” she said.

Melnick, the USC professor, said many workers don’t realize how much they are losing as their employers’ premiums rise. He tells people to look at their W-2 tax form from last year, where employers are required to report the cost of the employee’s premium in box 12, under “Code DD.”

He said USC’s premium for his family of four is $45,000.

“The base is so high that even a small increase has a big impact,” he said. The continuing annual increases, he said, are “bad news for everybody.”

Travel insurance for Turkey has jumped almost 50 per cent in just a year, according to new data

Five European and Mediterranean destinations including some hotspots much loved by British tourists have been named as having seen big rises in insurance costs, directly caused by the Middle East crisis. Travel insurance for Turkey has jumped 46% in just a year, according to new data analysing 5,000 policies across popular destinations near conflict zones.

There is no sign of the Middle East conflict calming down – today Iran fired ballistic missiles and drones towards Bahrain and Kuwait, Bahrain’s government said, adding that they were intercepted.

Bahrain’s government called on Tehran to immediately cease attacks on Gulf neighbours that it deemed a “serious escalation”. Iran’s Foreign Ministry said the US early Saturday attacked surveillance facilities on Qeshm Island and near Sirik that it said were used to protect borders and “ensure the security of navigation in international waters”.

The latest exchange of fire came as the Trump administration pressed Iran to make a deal to end the war that has strained the global economy and threatened a hunger crisis in some of the world’s most vulnerable countries.

The US military earlier said it shot down several Iranian missiles and drones launched towards the Strait of Hormuz and Gulf Arab allies, and struck some of the Islamic Republic’s coastal surveillance radar sites in response.

It has had a big impact on the region with some popular destinations seeing big rises in premiums. Quotezone travel insurance expert Helen Rolph warned travellers not to assume last year’s prices still apply and urges holidaymakers to compare policies carefully, buy cover as soon as they book, and check Foreign Office advice before travelling.

Industry experts compared 5,000 travel insurance premiums across five popular tourist destinations close to conflict zones, revealing which countries have seen the biggest price increases over the past year.

Prices in Turkey have been affected the most despite it traditionally being considered one of the most popular and cost-effective destinations for UK holidaymakers over recent years.

Standard travel insurance premiums to the country have jumped from £40.56 in early 2025 to £59.19 just a year later – a rise of 46% or almost £20 per trip – which may be due to the fact it shares a border with Iran.

Holidaymakers travelling to Bulgaria are also seeing a sharp rise with prices up 19%, possibly down to its proximity to Ukraine.

Premiums for Cyprus have increased by 6%, Egypt by 4% and Poland by 8%. To gather the data, popular holiday destinations for British tourists were cross-referenced with countries geographically close to conflict zones, namely Ukraine and Iran, creating a dataset of major holiday hotspots in relative proximity to areas of geopolitical tension.

Insurers regularly reassess risk when global tensions rise, particularly in destinations close to areas where travel complications might become more likely.

Destinations situated close to areas experiencing heightened tensions – such as Iran and Ukraine – could see premiums shift as insurers reassess the likelihood of travel disruption, delays or emergency evacuation should issues escalate.

Helen Rolph, travel insurance expert at Quotezone.co.uk said: “Travel insurance prices change constantly as insurers respond to global events, the number of claims made and healthcare costs.

“Even if a destination remains popular despite its proximity to ongoing conflict, premiums can rise when the wider region becomes more uncertain.

“Travellers and holidaymakers shouldn’t assume last year’s prices will still apply and make sure they’re comparing policies carefully rather than opting for the cheapest option, as cover can vary significantly.

“It’s also sensible to arrange insurance as soon as a trip is booked, check government travel advice before departure, and ensure any medical conditions are fully declared.

“Travel disruption insurance can also be useful as it covers a wider range of issues while travelling but it’s important to remember that travel insurance won’t provide cover if the foreign office advises against travel to that region and most travel insurance policies won’t cover war related incidents. It’s crucial for holidaymakers to check what is and isn’t covered on their policy and add any extras or specialised cover they might need.”

Travel Insurance Premiums

Country // Average 2025 // Average 2026 // Average Price Change // % Change

Turkey £40.56 £59.19 £18.63 46%

Bulgaria £32.70 £38.82 £6.11 19%

Poland £10.50 £11.32 £0.82 8%

Cyprus £43.21 £45.80 £2.59 6%

Egypt £68.52 £71.30 £2.78 4%