Artificial intelligence is likely to fuel surging medical care costs over the next year, according to a PwC report projecting a 9% rise in commercial health plan trends for 2027—the steepest increase in 17 years.

Key Drivers of Cost Increase

Provider adoption of AI-enabled revenue tools tops the list of cost inflators, joining pharmacy spending, behavioral health demand, reimbursement pressures, and No Surprises Act disputes as key drivers.

Seventy percent of health plans surveyed rank these AI-enabled tools as one of the top three inflators. As providers seek better payment for appropriate care, the technology allows for greater specificity in recording severity and reimbursable services, resulting in higher paid amounts overall.

The five main inflators identified in the report are: AI-powered tools helping providers optimize revenue through better documentation and coding, elevated provider reimbursement pressure fueled by inflation and market consolidation, rising pharmacy costs, continued growth in behavioral health services demand, and increased out-of-network reimbursements through the Independent Dispute Resolution process.

Actuaries project the Group market medical cost trend at 9% and the Individual market at 8.5% for 2027. These numbers reflect an upward revision for 2026 trends as well.

Original reporting: Tampa Free Press — read the source article.