The Steady Erosion of Healthcare Affordability

By 2030, a significant share of US employers will cross the threshold where healthcare costs consume roughly 9% of total revenue, the same level that pushed General Motors toward bankruptcy in 2008. The current trajectory is unlike anything employers have navigated before.

Kevin Fyock, who leads innovation for AI and health solutions at Aon, and Kevin Smith, Aon's US health market leader, trace exactly why. The crisis traces to a few compounding forces: a population that is getting less healthy, not more; high-cost claimants whose treatment costs have risen sharply alongside pharmaceutical and gene therapy advances; and a fragmented system where even good solutions fail because members cannot find or navigate them.

Aon's 2025 survey projects medical and pharmacy trend above 9%, and roughly 80% of employers responding plan to increase employee contributions to offset it. What makes this cycle different is that cost-shifting is running out of room. At some point, it starts pulling from the salary budget, and total rewards stops being competitive.

Vendor consolidation is coming. Post-pandemic, employers added solutions at a pace that created a 30% to 40% increase in programs, and a near-majority of those never generated a positive return on investment. The primary driver of cuts is not ROI alone but utilization. If employees are not using a program, the conversation ends quickly.

Curated, quality-focused networks are replacing the philosophy of maximum breadth. Predictive analytics and AI are moving from aspiration to active deployment in identifying high-cost claimants earlier, when intervention is still possible. Wearables are on the verge of enabling home-based chronic condition management at a scale that could reduce the need for expensive in-person care. The tools exist. The call to action is for employers to stop waiting for the system to fix itself and start treating innovation as a core operating responsibility.

Listen to Kevin Fyock and Kevin Smith on the 2030 cost horizon and the vendor consolidation already underway. They examine how the steady accumulation of cost-shifting, rising premiums, and benefit erosion is quietly undermining employee financial security, and what advisors and employers can do to reverse the trend before it becomes a talent and retention problem.