Episcopal employee insurance rates rising as much as 14% in 2027, further straining church budgets

Many dioceses and congregations are navigating double-digit rate increases for the Denominational Health Plan in 2027. Photo: Episcopal News Service

[Episcopal News Service] Episcopal dioceses and congregations are getting a first look at the 2027 health insurance landscape, and it will be expensive.

The Episcopal Church Medical Trust, which manages the Denominational Health Plan that insures all full-time clergy and lay employees, has projected an overall cost increase of 12.6% for the year. The rate increases for the vast majority of individual dioceses range from 6% to 14%, potentially adding a substantial financial burden to many Episcopal congregations, including some that already are struggling to make ends meet.

For some Diocese of Southwest Florida congregations, which span from the Tampa area to Naples, getting hit with a large health insurance increase on top of several years of property insurance increases “feels like an existential crisis,” Mike Booher, the diocese’s canon of finance and administration, told Episcopal News Service. “We’re working very hard at a losing battle.”

The inflationary pressure on insurance costs is not unique to The Episcopal Church. Across the health insurance industry in recent years, costs have been driven higher by an aging population, increasingly expensive treatments and the growing use of high-cost specialty drugs, including GLP-1 prescriptions for weight loss. In response, the Medical Trust, an affiliate of Church Pension Group, will end coverage of GLP-1s except for treatment of type 2 diabetes. Episcopal employees will also see higher deductibles, higher copayments and higher out-of-pocket maximums for 2027 to help minimize the premium increases.

At the same time, some dioceses are considering options for short-term and long-term assistance for their congregations. The Diocese of Massachusetts, for example, is offering one-time subsidies to bring Massachusetts congregations’ rate increases in 2027 from 10.5% down to 5.25%.

“The spiraling costs of health care and resulting insurance premium increases affect every congregation in our diocese, large and small,” Bishop Julia Whitworth said in a written statement to ENS. “As a diocesan community, we support one another in moments of challenge. It is important to me that our diocese offer financial support to reduce premium costs for our 170 worshipping communities, so that they are not saddled with budget-breaking, unexpected rate increases in 2027.”

In the United States, a family of four with an employer-sponsored health plan is spending an average of $37,824 a year on health care in 2026, according to the Milliman Medical Index, after costs jumped by nearly 8% from 2025. CPG’s most recent annual report, released in July 2026, alludes to the industry-wide insurance inflation.

“Amid some of the highest market trend levels seen in the last 30 years, employer-sponsored plans continue to face sustained cost pressure, driven by factors largely beyond any single plan’s control, including medical inflation, rising prescription drug prices, increased chronic disease prevalence, and regulatory coverage mandates,” the annual report said.

New York Bishop Matthew Heyd has also sounded the alarm about the impact of rising health insurance costs in his diocese, which spans Manhattan, Staten Island and the Bronx in New York City and several less-populated counties upstate. The Diocese of New York’s insurance rates are going up 14% in 2027.

“This is a steep increase. It will be painful for many of our congregations. Health care costs can force congregations to decide whom they can call, and whether they can afford a full-time priest,” Heyd said this month in a message to his diocese.

The diocese formed a task force a year ago to consider ways to address the long-term trend toward costlier health care. Any solutions developed by that task force could “take years to phase in,” Heyd said. In the short term, church leaders are gathering now in meetings around the diocese to understand the new health coverage plans and discuss options for handling the 2027 cost increase.

The increases also affect the cost of insuring the churchwide staff. The Domestic and Foreign Missionary Society, the church’s corporate entity, budgeted $4 million for employee health insurance in 2026, and its 2027 rates are going up by 13%, according to a church spokesperson.

The Diocese of Massachusetts, in its message this month about health insurance rates, made clear that it will only be offering “a one-time offset” of up to $280,000 for 2027. Leaders in the Boston-based diocese still will need to work with congregations on a sustainable long-term approach to continued cost increases.

“By providing this one-time assistance, our Diocesan Council hopes to create a bit of breathing room for congregations to plan for what will be significant increases in coming years,” Whitworth told ENS. “As part of our diocesan commitment to congregational vitality, we are actively exploring long-term, sustainable solutions for providing benefits to our clergy and lay professionals that mitigate rising costs.”

The Episcopal Church’s canons mandate that health care coverage be available to all full-time employees through the Denominational Health Plan, created in 2009 by General Convention. Church Pension Group, through the Medical Trust, administers that insurance, and each year it adopts a range of plans and coverage levels from which dioceses can choose.

Rates are specific to each diocese and depend on several factors, including age and other workforce demographics, geographical price differences, General Convention policies and each diocese’s three-year trend in incurred claims. The Denominational Health Plan requires dioceses to offer at least one plan in which premiums will be covered by the diocese or congregation, though employees can choose to pay additional premiums for plans with higher coverage levels.

Annual rate increases for the Denominational Health Plan in past years typically have ranged from 4% to 8%, so the sharp increase for 2027 was both unexpected and unprecedented, policy managers say. They added that the Medical Trust is working to better align coverage and costs after being hit with several large individual claims in recent years.

CPG has not adjusted its deductibles, copayments and out-of-pocket maximums in six years. Without any chance to redesign those plans in 2027, the churchwide rate increase would have reached 22.5%, according to John Servais, CPG’s senior vice president of benefits policy and design.

In particular, coverage of GLP-1s for weight loss is “becoming unaffordable for the plan,” Servais said in an August webinar about the changes. “It wasn’t an easy decision to make,” he said, but ending that coverage allowed CPG to reduce the overall rate increase by 3.6%, saving $8.9 million. Employees will be offered an optional new weight-loss and health management service called Digbi Health.

CPG was able to further reduce the 2027 rate increase by 5.6 percentage points, saving $13.8 million, through other plan changes, including raising most deductibles by $500 and making $5 or $10 adjustments to copayments. Out-of-pocket maximums for most plans will go up by $1,500.

In the webinar, Servais described health insurance pricing as experiencing “an elevated trend cycle” and “the highest trend levels I’ve seen.”

“One of the most troubling things [is] there’s really no major solution to try to address it. We’re living in a broad inflationary market,” Servais said. He spoke further about those challenges in an online article shared this month by CPG.

Also, this month, Mary Kate Wold, president and CEO of Church Pension Group, underscored the widespread impact these increases are having on churches and other employers when she signed a joint statement with the leaders of five other denominational benefits providers. The signatories represent The Episcopal Church, the Evangelical Lutheran Church in America, the United Methodist Church, United Church of Christ, the Presbyterian Church and Roman Catholic institutions.

“The cost of health care continues to rise at a pace that is placing significant pressure on the plans, organizations and communities we serve,” the benefits administrators said. “These pressures are not isolated to one denomination, one benefit provider, or one plan. They reflect broader challenges across the U.S. health care system, including rising hospital and provider costs, increased use of high-cost medications, greater demand for care, and more complex and ongoing healthcare needs.”

The Diocese of Southwest Florida is unable to offset the cost of the health insurance increases for its 75 congregations, partly because it already subsidizes another type of congregational insurance known as directors and officers insurance, Booher told ENS. The diocese also helped most of those congregations pool their property insurance coverage starting this year, which has produced some savings.

Now, those congregations’ health insurance rates are going up at least 13% in 2027. Some congregations are on sound enough financial footing to absorb those additional costs, Booher said, while others may be forced to consider staff reductions, such as going from a full-time rector to a part-time rector.

Unless the diocese and wider church can find a long-term solution to these costs, Booher said, “you’re just adding to the death spiral of the church.”

– David Paulsen is a senior reporter and editor for Episcopal News Service based in Wisconsin. He can be reached at dpaulsen@episcopalchurch.org.