Mark Cuban says rising health benefit costs threaten US jobs

The entrepreneur argues that higher employer spending on health benefits could lead to fewer hires and more layoffs than artificial intelligence. Research supports a link between health costs and employment, but does not directly compare that effect with AI.

In a post on X, Mark Cuban wrote that, for the foreseeable future, employer health-benefit costs would affect jobs more than artificial intelligence. He founded online pharmacy Cost Plus Drugs and is known as a former Shark Tank investor and owner of the Dallas Mavericks.

US health spending reached $5.3 trillion in 2024, or about 18% of gross domestic product, according to Centers for Medicare & Medicaid Services data cited by Fortune. Mercer, which surveyed more than 1,800 employers, estimates that health-benefit costs per employee could rise 8.2% in 2027. The increase could prompt companies to change insurance plans, including by raising deductibles and employee copayments.

A 2024 study by Yale’s Tobin Center for Economic Policy found a link between higher health-care prices and lower employment at employers outside the health sector. The authors estimated that a 1% price increase was associated with an approximately 0.4% decline in payroll and employment. The paper did not compare that effect with AI, so Cuban’s claim about which factor has the greater impact remains his assessment.

Cuban launched Cost Plus Drugs in 2022 and says the company can offer lower prices by bypassing pharmacy benefit managers. According to KFF, the three largest such managers handle about 80% of prescription claims in the United States.