On October 8th, billionaire entrepreneur Mark Cuban posted a blunt warning that most business coverage missed: the thing that will get your employees fired is not a chatbot. It's their health plan.
In an X post from last month that's now circulating widely, Cuban wrote: “I hope people realize that for the foreseeable future, the cost of health care benefits will get more people fired, or not hired, than AI.” That wasn't a throwaway take. Cuban has spent the last four years building Cost Plus Drugs, his online discount pharmacy designed to cut around the bloated pharmacy benefit manager system, and he's watched health care costs reshape hiring decisions in real time.
Fortune reporter Marco Quiroz-Gutierrez dug into the numbers, and they are hard to argue with.
What This Actually Means
For small business owners, health insurance isn't a perk. It's a make-or-break cost that directly determines whether you can grow your team, keep the people you have, or compete for talent against larger companies.
The pressure is getting worse, not better. Mercer's global consulting firm surveyed more than 1,800 employers and found health care costs per employee are projected to increase 8.2% in 2027. That would be the largest single-year jump since 2003. For a business with ten employees offering family coverage, that could mean an additional $20,000 or more in annual benefits costs overnight.
Meanwhile, nearly half of large U.S. employers with 500 or more employees say they plan to make changes to their medical plans next year, primarily by raising deductibles and copays to offload costs to employees. That creates a two-tier competitive problem for small businesses: you either absorb the cost increase or you lose talent to larger employers who can take the hit.
The Numbers Behind It
The scale of the problem is almost hard to process. According to the Centers for Medicare and Medicaid Services, the U.S. spent $5.3 trillion on health care in 2024, roughly 18% of GDP. That's more than double the $2.5 trillion spent in 2000. Per person, the U.S. pays $14,775 annually compared to $7,860 per person in other high-income countries.
The average annual premium for family coverage hit $26,993 in 2025, according to KFF's Employer Health Benefits Survey. Employers cover the majority of that cost. For context, Cuban noted in an earlier post that when you add in the administrative overhead of managing benefits, health care typically becomes the second-largest expense after payroll for most businesses.
The labor market connection is direct: a 2024 paper from Yale's Tobin Center for Economic Policy found that a 1% increase in health care prices translates to a roughly 0.4% decrease in employment at businesses outside the health sector. As Cuban put it, “Rather than cutting wages, employers respond to increases in insurance premiums by cutting the number of workers they employ.”
The Hustler's Library Take
Everyone is obsessing over AI replacing workers. Mark Cuban is pointing at a much quieter threat that has been compounding for decades and shows no signs of slowing: the cost of keeping a human on payroll has nothing to do with their salary.
For small business owners, this reframes the entire hiring conversation. You are not just competing on wages. You are competing on your ability to absorb a benefit cost that grows at 8% per year. A larger competitor with 200 employees can negotiate group rates, self-insure, and eat a cost increase. A five-person shop cannot. This is one of the structural disadvantages of staying small that almost nobody talks about honestly.
The good news in Cuban's argument is the implied solution: if the problem is structural and rooted in the pharmacy benefit manager system, hospital consolidation, and administrative overhead, then there are workarounds that do not require waiting for federal legislation. Cost Plus Drugs is one. Health sharing plans are another option some small employers are testing. And negotiating directly with local providers or using healthcare concierge services is a growing tactic for businesses under 20 employees.
The bad news: none of these fixes are as simple as installing an AI tool. This is a problem that demands owner-level attention and an annual review of your benefits structure, not a one-time decision.
What You Should Do
1. Run your 2027 benefits numbers now, not in January. Mercer is projecting an 8.2% jump for 2027. Your renewal notice will arrive in Q4. If you wait until renewal, your options shrink significantly. Get quotes now from at least two other carriers or brokers. For small businesses on the SHOP marketplace, compare plans before the November 1st open enrollment window opens.
2. Explore Cost Plus Drugs as a supplemental benefit at zero cost. Cuban's platform lets employees (and anyone) buy generic drugs at near-manufacturer cost, completely bypassing PBM markups. You can share it with your team today with no enrollment required. For a worker taking even one maintenance medication, it can save hundreds per year and makes your benefits package more competitive without adding to your premium costs.
3. Look at health-sharing models or reference-based pricing for your next renewal cycle. These are not traditional insurance, but for businesses with fewer than 25 employees, they can cut monthly costs by 30% to 50% compared to ACA marketplace group plans. They are not right for every situation, but if you have never run a comparison, you are likely leaving money on the table. A benefits broker who works specifically with small businesses is worth one conversation.
If you want to stay ahead of the small business moves that actually matter, join Hustler's Library free and we will keep you in the loop.
Source: Fortune, October 8, 2026 | Also see: KFF Employer Health Benefits Survey 2025
Related reading: Small Business Hiring Slowed in September | The Hidden Cost of Complexity | The 4 Revenue Gaps Every Small Business Has | Mark Cuban: Everything You Need to Know
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