Health Insurance Costs Skyrocket to $27,000 Amid Rising Premiums

UPDATE: Health insurance costs for families through employers have surged to an astonishing $27,000 per year, equivalent to the price of a new Toyota Corolla hybrid. This alarming rise comes as more than 154 million people with employer-sponsored insurance brace for further price hikes, according to a newly released report from the Kaiser Family Foundation (KFF).

The report, which surveys employer health plans annually, reveals that premiums for family coverage increased by 6% in 2025, marking the third consecutive year of such significant rises. This escalation reflects a troubling trend, as average costs for family coverage have soared by 26% over the past five years, outpacing wage growth by 29% and inflation by 24%.

The financial strain is particularly felt by small businesses. “It’s a concern as health costs just keep going up,” stated Eric Trump, controller at Steve Reiff Inc. in South Whitley, Indiana. His company’s health insurance costs jumped 8% for the 2026 fiscal year, mirroring the trend seen across many businesses. Trump noted that about half of his employees opt out of their employer’s health insurance due to the high costs.

Currently, workers are contributing an average of $1,440 for individual coverage and $6,850 for family coverage. The burden is compounded by rising deductibles; over one-third of covered workers now face deductibles of $2,000 or more, a figure that has increased by 32% in the last five years.

The KFF report attributes these rising costs to escalating drug and hospital expenses, with no signs of relief in sight. “Early reports suggest that cost trends will be higher for 2026,” the survey warns, indicating potential for even steeper premium hikes unless employers can find ways to mitigate these expenses.

A significant concern is the increasing cost of GLP-1 drugs for weight loss, which many employers now cover. “Large employers know these high-priced weight-loss drugs are an important benefit for their workers, but their costs often exceed their expectations,” noted Gary Claxton, KFF senior vice president.

As employers grapple with these rising costs, many are shifting financial burdens to employees, but it’s unclear how much more workers can endure. Nearly half of large employers report that their employees express “moderate” or “high” concerns about their cost-sharing levels.

Amid this crisis, the federal government has been embroiled in a shutdown since October 1, 2023, due to a stalemate over health insurance funding for 22 million Americans on Affordable Care Act plans. The current impasse could lead to the expiration of critical tax credits, which would double premiums for many consumers starting in January.

The KFF report is based on a comprehensive survey of 1,862 non-federal public and private employers with 10 or more employees. As the nation faces these escalating healthcare costs, the implications for families and businesses are profound, signaling a pressing need for policy intervention and reform.

As discussions continue in Congress, the immediate future of health insurance affordability hangs in the balance. Stay tuned for updates as this developing situation unfolds.