LUGPA Policy Brief – Rising Health Insurance Costs Threaten Small Businesses and Access to Care

September 2026

At a Glance

The Issue:
Insurers are requesting a median 14% increase in small-group health insurance premiums for 2027, according to an analysis of preliminary rate filings by the Kaiser Family Foundation (KFF).

The Challenge:
Double-digit premium increases add to the cost of employing physicians, APPs, nurses, technicians and other skilled workers. Small employers may have to absorb higher costs, shift costs to employees, reduce benefits or reconsider coverage.

Why It Matters:
Many independent urology practices are small and mid-sized businesses already facing significant increases in labor, technology, supplies and other operating costs. Rising health benefit costs further squeeze resources available for patient care and practice investment.

The Broader Concern:
When practice costs rise faster than reimbursement, financial pressure can make independent practice less sustainable and contribute to consolidation.

LUGPA’s Position:
Policymakers should address the underlying drivers of health care costs, promote affordable coverage and avoid policies that disproportionately burden small employers, independent practices and patients.

Background

KFF's analysis of preliminary 2027 rate filings from nearly 300 insurers across all 50 states and the District of Columbia found a median proposed small-group premium increase of 14%. Most proposed increases fall between 10% and 20%, with some exceeding 30%. Insurers cite rising medical prices, prescription drug costs and utilization among the primary drivers.

For small employers, these increases come on top of rising labor, technology, compliance and other business costs. Employers may respond by absorbing the increases, shifting costs to employees, reducing benefits or reconsidering whether they can continue offering coverage.

Impact on Independent Urology Practices

Rising health insurance costs can:

• Increase workforce costs as practices compete with hospitals and health systems for physicians and other professionals.
• Increase operating expenses when practices are already facing significant financial pressures.
• Limit investment in care by reducing resources available for staffing, technology and services.
• Complicate recruitment and retention when practices struggle to maintain competitive benefits.
• Increase consolidation pressure as larger organizations may have greater resources to absorb rising costs.

Why It Matters

Health care affordability is also a practice sustainability issue.

Many independent urology practices are small and mid-sized businesses, while others are larger physician-led organizations. Regardless of size, independent practices must manage rising costs while Medicare and other reimbursement often fails to keep pace with inflation and the cost of providing care. Additional increases in employee health benefits leave fewer resources for hiring, technology, services and patient access.

Over time, these pressures can make independent practice less sustainable and contribute to consolidation—potentially reducing patient choice and access to community-based specialty care.

LUGPA’s Position

LUGPA supports efforts to make health coverage more affordable and sustainable for employers and employees. Policymakers should:

• Address underlying health care costs rather than simply shifting costs to employers, employees or patients.
• Promote affordable coverage for small businesses and their employees.
• Reduce unnecessary administrative and regulatory burdens that increase practice costs.
• Support a competitive health care marketplace in which independent practices can continue to compete.
• Ensure payment policies recognize the cost of providing care, including appropriate updates for inflation and practice expenses.
• Protect patient choice and access to community-based specialty care.

The Bottom Line

Small businesses cannot absorb unlimited increases in health care costs.

A 14% median proposed increase in small-group premiums for 2027 adds another layer of financial pressure for independent urology practices. Many independent practices are small and mid-sized businesses that must balance rising operating costs with the need to maintain competitive benefits, invest in their practices and provide high-quality patient care.

Policymakers should address the underlying drivers of health care costs while ensuring small employers and independent practices are not disproportionately burdened.

Sustainable health coverage requires sustainable physician practices. Supporting independent practices helps preserve competition, patient choice and access to specialty care in communities across the country.