URGENT UPDATE: Health insurance costs for families through employer plans have surged to an astonishing $26,993 per year, equivalent to the price of a new Toyota Corolla hybrid. This alarming rise impacts more than 154 million Americans, with significant increases predicted for the future, according to a recent report from the Kaiser Family Foundation (KFF).
The findings reveal that premiums for job-based health insurance rose by 6% in 2025, marking the first time in two decades that family coverage has increased by this amount for three consecutive years. This surge comes as the federal government faces a shutdown that began on October 1, 2023, due to ongoing disputes over health insurance for the 22 million Americans reliant on Affordable Care Act plans.
As costs continue to spiral, families are feeling the financial pinch. Over the past five years, premiums have jumped 26%, outpacing wage growth (29%) and inflation (24%). The average annual premium for individual coverage also saw a 5% increase, climbing to $9,325—nearly $3,000 higher than in 2016.
“It’s a concern as health costs just keep going up,” stated Eric Trump, controller at Steve Reiff Inc. in South Whitley, Indiana. In his company, health insurance costs rose 8% for the upcoming fiscal year, forcing many employees to decline coverage due to high costs. “There’s not a lot we can do, as we don’t have enough employees to spread out the costs,” he added.
The burden of rising premiums is exacerbated by increasing deductibles, with more than one-third of covered workers now enrolled in plans with deductibles of $2,000 or more. This figure has surged 32% over the last five years and 77% in the past decade.
The KFF report attributes rising insurance costs to escalating drug and hospital expenses, which show no signs of declining. As employers grapple with these financial pressures, many are forced to reconsider coverage options, particularly for high-priced GLP-1 weight-loss drugs. “Large employers know these new high-priced weight-loss drugs are an important benefit for their workers, but their costs often exceed their expectations,” noted Gary Claxton, a KFF senior vice president.
With nearly half of large employers reporting that employees express “moderate” or “high” concerns about their cost sharing, the implications are dire. Workers are already facing higher out-of-pocket expenses, and as costs rise, the question remains: how much more can they endure?
The urgency of this situation is compounded by the ongoing federal budget impasse. Democrats are holding out on a new spending measure until Republicans agree to extend tax credits that help the 22 million people who purchase health coverage through ACA marketplaces. Without congressional action, these tax credits are set to expire, potentially doubling premiums for many consumers starting in January.
The KFF report is based on a survey of 1,862 non-federal public and private employers with 10 or more workers. As health insurance costs continue to climb, this issue demands immediate attention from lawmakers and employers alike.
As the situation develops, the focus will be on potential legislative solutions to ease the burden on American families and prevent millions from losing their health coverage in the wake of budget cuts. Stay tuned for further updates as this critical story unfolds.
