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.

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)

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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.”

Thousands of people across 34 states are experiencing explosive and prolonged diarrhea due to a food and water-borne parasitic disease that has prompted experts to urge people to take extra precautions when preparing food.

A specific type of produce, grower or supplier has not been identified as the source of each state’s outbreak; officials say there could be multiple sources.

At the epicenter of the cyclosporiasis outbreak in Michigan, where more than 3,700 residents have been infected, public health experts say a possible culprit under investigation is leafy greens.

Some Taco Bell locations in Michigan are also being investigated after the chain voluntarily stopped selling lettuce, cilantro, onion, pico de gallo and guacamole, “due to a nationwide recall.”

Even though the clusters of outbreaks are concentrated in the Midwest and East Coast, epidemiological and infection prevention experts urge people in California and the rest of the U.S. to be cautious with their produce and take the necessary steps to reduce their risk of infection.

California has reported 41 cases of cyclosporiasis, between January and June, none of which are linked to the current outbreak. That is below the average of 100 cases reported annually in California, usually between May and August, said Robert Barsanti, spokesperson for the California Department of Public Health.

“It’s important to understand that California experiences cases of cyclosporiasis every year, with a majority of cases acquired internationally,” said Erica Pan, director of the state agency. “Cases for 2026 are well within expected ranges for California.”

Rising cyclosporiasis cases shouldn’t deter Californians from eating fruits and vegetables. Instead, experts say, it’s a call to take extra precautions to reduce the risk of contracting the parasitic disease.

Which produce are potential sources of cyclosporiasis

In the U.S., food-borne outbreaks of cyclosporiasis have been linked to various types of fresh produce imported from Latin America, including raspberries, cilantro, basil, snow peas and mixed salad, according to the California Department of Public Health.

One of the largest cyclosporiasis outbreaks in North America was linked to imported raspberries from Guatemalan farms in 1996, said Dana Mordue, associate professor of pathology, microbiology and immunology with New York Medical College.

At the time, more than 1,400 cases of the disease were reported in 20 states, the District of Columbia and Canada.

How to reduce your risk of contracting cyclosporiasis

The first step is to wash your hands with soap and water before handling produce.

Then, experts say:

• Wash all fruits and vegetables thoroughly under running water before eating, cutting or cooking.
• Remove and discard outer leaves from lettuce and leafy greens.
• Cook vegetables and herbs whenever practical, especially for vulnerable populations including young children, pregnant women and immunocompromised individuals.
• Prevent cross-contamination: Use clean cutting boards, utensils and food-contact surfaces. Keep ready-to-eat foods separate from raw produce during preparation.
• Refrigerate cut, peeled or cooked fruits and vegetables as soon as possible (within two hours).
• Avoid food or water that may be contaminated by human feces, especially when traveling to countries where tap water or food may be unsafe.

If your produce comes in a package that says “pre-rinsed,” experts say you should still take the time to rinse it yourself.

Will a simple rinse of all types of fruits and veggies reduce my risk?

Some fruits and vegetables should be rinsed and others scrubbed, depending on the type of produce, said Britanny Saunier, executive director with the Partnership for Food Safety Education, a nonprofit that develops and promotes food safety material to reduce food-borne illness.

All types of produce should be rinsed under running water, including those with skins or rinds that are not eaten.

“We recommend an extra step for those firm-skinned fruits and vegetables — such as a cucumber or melon — which should be rubbed by hand or scrubbed with a clean brush while rinsing under running tap water, Saunier said.

You should dry your cleaned produce with a clean cloth or paper towel.

Some supermarkets offer “produce washes,” usually provided in spray bottles, which claim to break down surface waxes and remove dirt, pesticide residues and harmful bacteria. But the U.S. Food and Drug Administration does not recommend them because the safety of their residues has not been evaluated, she said.

“Many types of fresh produce are porous and could absorb these products, potentially changing their safety and taste,” Saunier added.

Rinsing and scrubbing is the most effective method of lessening your risk of contracting the disease but it doesn’t eliminate it entirely, Mordue said.

That’s because the parasite has a tough outer shell, making it difficult to eliminate, said Dr. Norman Beatty, associate professor of medicine with the Division of Infectious Diseases & Global Medicine at the University of Florida College of Medicine.

The parasites’ cell walls are “highly resistant to adverse environmental pressures and traditional disinfectants,” Beatty said.

In general, the parasite has been found in soil and from there it sticks to produce, likely due to the use of contaminated water or inadequate hygiene among food handlers, she said.

“It is unclear how to safely remove these [parasites] from produce once they have contaminated soil or plant matter, but merely washing with water is likely not to remove them prior to eating,” Beatty said.

Are there any types of produce I should avoid entirely?

Because lettuce and bagged salad greens have been identified as potential sources of the outbreak in Michigan, Mordue said she would be cautious with bagged leafy greens.

As a resident of New York, one of the states currently reporting an outbreak, Mordue said she has a bag of packaged greens in her fridge that she plans to toss in the trash.

The advice for Californians might be slightly different since the state isn’t reporting an outbreak. Rinsing leafy greens before serving them is fine, Mordue said. But if you can do without them for the time being, she said, avoid them.

In the case of packaged spinach, cooking the leaves can reduce your risk of contracting cyclosporiasis.

How does this type of outbreak end?

It’s difficult to say when an outbreak might end until the source of the parasitic disease is identified.

When local and federal public health officials, “zero in on a specific causative agent, they can end it pretty quickly,” Mordue said.

Once a source is identified, she said, a recall notice will be issued for the contaminated produce and people will know exactly what they shouldn’t eat.

“The sooner they can figure it out, the sooner it’s going to end,” Mordue said. “That said, if they cannot figure out the source this could go on for a while.”

What are the symptoms and remedies for cyclosporiasis?

Someone who contracts the parasite might end up with week-long watery and explosive diarrhea, “which is bad enough,” she said.

Other symptoms include loss of appetite, weight loss, cramping, bloating, increased gas, nausea and fatigue.

If you start to have debilitating diarrhea and feel fatigue, experts urge you to seek medical care.

Medical providers will likely test a stool sample to determine whether you’ve contracted cyclosporiasis and treat you with an antibiotic called Bactrim, among other treatments.