The manual trend that will anchor most 2027 self-funded and fully-insured renewal quotes is not a projection pulled from thin air: Segal validates its annual survey against SHAPE, its own claims data warehouse, and this year that validation supports a 9.9% medical trend, a 15-year high, with prescription drug trend at 11.5% for a second straight year above medical (Segal, July 2026).

What the Survey Actually Prices

Segal's 30th annual Health Plan Cost Trend Survey draws its numbers from the supply side of the market: managed care organizations, health insurers, PBMs and TPAs reported the trend assumptions they are already loading into 2027 pricing, not what employers expect to pay (Segal, July 2026). That distinction matters more this year than most, because the 9.9% figure is checked against actual 2025 experience in SHAPE, and Segal reports minimal variation in medical trend across PPO/POS, HMO/EPO and high-deductible plan designs, with the full plan-type breakdown and a standalone 2027 specialty-drug percentage held back for subscribers. Edward Kaplan, Segal's national health practice leader, put the print bluntly: "We have seen elevated medical trends for several years, but costs now feel like they're reaching a breaking point" (Segal, July 2026). A manual built on a claims warehouse spanning a substantial share of the commercial insured and self-insured market carries real weight in a credibility blend, which is the calculation our earlier piece on PwC's 9% group medical benchmark worked through for a 20,000-life book: with two years of plan data, the external number still claims roughly two-thirds of the weight. Segal's 9.9% is the alternative manual now sitting on the other side of that same blend, and it runs 0.9 points above PwC's.

Pharmacy Running Ahead of Medical for a Second Year

The 1.6-point gap between the 11.5% pharmacy trend and the 9.9% medical trend is not a one-year blip. Segal's Rx projection has now sat above its medical projection for two consecutive survey cycles, reversing the pattern in which medical led and pharmacy trailed as the smaller share of total plan cost (Segal, July 2026 and Word & Brown JR Report, July 2026). A blended plan trend anchored on the medical figure, or weighted toward it because pharmacy still represents a minority of total allowed cost, as our MMI pharmacy decomposition piece detailed for the 2026 experience year, will understate any book whose pharmacy share is climbing faster than its medical share, which is precisely the direction specialty and GLP-1 utilization is pushing every book right now.

The driver is utilization, not unit cost, which is why formulary tightening and rebate renegotiation will not bend this line by much. Segal's prior-year survey attributed 62% of the specialty drug gross cost-trend increase to utilization growth before rebates, meaning more members starting therapy and staying on it longer, not price inflation on existing prescriptions. Anti-obesity medication coverage compounds the effect directly: plans covering GLP-1s for weight loss carry materially higher pharmacy trend than plans that exclude the indication (Segal, July 2026). That turns a benefit-design decision made months ago into a trend-selection variable sitting at the same renewal table today.

A Credibility Problem the Formula Does Not Resolve

The mechanics of a manual-versus-experience blend do not care how uncomfortable the external number feels; a book's credibility weight depends on its exposure volume and the between-plan variance in the reference population, not on whether the print is convenient. What changes when the manual jumps to a 15-year high is the size of the gap the blend has to cross. A group whose own experience trend has been running in the mid-single digits on 24 to 36 months of allowed-charge data now sits several points below the survey, and the wider that gap, the more the selection hinges on a credibility weight and variance parameter that are themselves estimated from limited data. Segal's SHAPE cross-check against actual 2025 claims gives that parameter more grounding than a projection without a claims-data validation step behind it, but it does not remove the judgment call. A filing or renewal memo that shows the gap, states the credibility weight applied, and reconciles it against both the manual and the book's own regression will hold up to scrutiny better than one that simply adopts 9.9% or defends a lower experience number without addressing the survey at all.

Two Drivers That Do Not Spread Evenly Across the Composite

Segal named AI-driven coding intensity as a factor behind roughly 20% of inpatient cost growth in the survey, alongside a No Surprises Act arbitration process that has generated an estimated $5 billion in system costs since 2022, with medical providers prevailing in 88% of independent dispute resolution cases at payment levels well above standard in-network rates (BenefitsPRO, July 2026, quoting Segal's Eileen Flick). Neither driver touches every claim line the same way. A 9.9% composite applied flat across inpatient, outpatient, professional and out-of-network claims overstates the trend on service lines with limited out-of-network exposure and understates it on lines running through IDR, particularly emergency medicine and anesthesiology, where arbitrated payments compound on top of the coding effect rather than substitute for it. A book with above-average out-of-network utilization in those specialties should expect its true medical trend to run above the composite even before the pharmacy line is considered, and a filing that discloses the out-of-network claim share alongside the trend selection gives a regulator a concrete basis for accepting a component that departs from 9.9%.

Coverage Breadth Turns One Manual Into Several

Only 36% of corporate employers cover GLP-1s for both diabetes and weight loss, versus 60% that cover the diabetes indication alone, and GLP-1 drugs already account for 11.4% of annual claims among employers reporting the data (IFEBP, July 2026). A single 11.5% pharmacy manual applied uniformly across a block of groups averages the trend of a narrow-coverage plan, where GLP-1 exposure is limited to diabetes claims, against a broad-coverage plan carrying the full weight-loss indication, and the two are not the same risk. A pricing actuary quoting a renewal for a broad-coverage group off the blended 11.5% is understating that group's true pharmacy trend; one quoting a narrow-coverage group off the same number is overstating it and risks losing the case on price to a competitor who split the manual. Becker's coverage of the IFEBP survey shows broad coverage has held roughly flat since 2025, which means this bifurcation is a structural feature of the pharmacy manual now, not a transitional one that will average out next cycle.

The Stop-Loss Multiplier

Stop-loss desks feel the 9.9%/11.5% print twice: once in the expected claims trend feeding the specific and aggregate attachment, and again through leveraged trend, where growth in a claim above a fixed specific deductible flows disproportionately to the carrier's layer. Segal's separate 2026 medical stop-loss premium survey, covering 225 health plans, found average premium increases of 12.7% for groups that held their deductible level flat, up from 9.7% the year before, and 11.5% across all groups including those that raised deductibles or added aggregating specific structures, up from 7.3% (Segal, June 2026). The number of claimants filing seven-figure claims has grown 25% per year on average over the last four years in SHAPE, and some specialty therapies now exceed $3.5 million per course of treatment. A 9.9% expected-claims trend compounding against that claim-severity tail is what turns a routine renewal into a double-digit premium increase before margin or expense load is even added, and it is why the specific deductible a group held flat last year is rarely still the right level for the 2027 renewal, a mechanism our leveraged trend piece and specific-claims trend analysis have each tracked through prior renewal cycles.

Whose Manual a Filing Leans On

PwC's Behind the Numbers put the 2027 group medical trend at 9.0% and the individual market at 8.5% when it published in June 2026, a full point below Segal's 9.9%. Both surveys draw on actuaries and analysts inside health plans; neither is wrong, and the gap is a reminder that "the market trend" a filing or renewal memo cites is really the trend one particular survey's respondent panel is reporting, with its own sample of plans, its own regional mix and its own validation method behind it. Segal's SHAPE cross-check against actual claims data is a specific methodological argument for weighting its 9.9% more heavily than a projection without that check, but a filing that cites Segal without disclosing that its number runs meaningfully above PwC's invites a regulator or a broker on the other side of a renewal negotiation to ask why the higher print was selected, and the honest answer, that the claims validation behind it is more current, belongs in the memo rather than left implicit.

What Moves Next on the Desk

Groups renewing for January 1, 2027 effective dates are receiving quotes built on this survey right now, which makes the next several weeks the window to reconcile a book's own experience trend against the 9.9%/11.5% manual before the renewal locks. Stop-loss buyers should ask their carrier directly whether the quoted rate uses Segal's 9.9% expected-claims trend, PwC's 9.0%, or an in-house manual, and whether the specific deductible was re-evaluated against the 12.7% stop-loss premium trend Segal separately reported in June rather than carried over at last year's level. Aegis Risk typically publishes its own medical stop-loss premium survey later in the year, and Milliman's Medical Index update next spring will be the next independent, claims-based check on whether the 9.9%/11.5% split held through the rest of 2026. Either would sharpen the credibility weight applied to Segal's print before the bulk of 2027 renewal season closes.

Further Reading

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