Health Insurance Costs Skyrocket to $27,000 Amid Crisis

UPDATE: Health insurance costs for families through employers have surged to an alarming $27,000 a year, equivalent to the price of a new Toyota Corolla hybrid. This significant increase is confirmed by a new report from the Kaiser Family Foundation (KFF), highlighting the growing financial burden on the over 154 million Americans relying on employer-sponsored coverage.

As of October 1, 2023, the average premium for family coverage has risen by 6% in 2025, marking the third consecutive year of increases above 6%. This trend poses a serious challenge as the federal government grapples with a shutdown linked to a deadlock over health insurance for another 22 million Americans under the Affordable Care Act (ACA).

According to KFF’s annual employer survey, the average premium for individual coverage has also climbed, reaching $9,325, a rise of 5% from previous years. Employers report that health costs are now significantly outpacing wage growth and inflation, raising concerns about the sustainability of coverage for many workers.

Eric Trump, controller at Steve Reiff Inc. in South Whitley, Indiana, expressed alarm over the 8% increase in his company’s health insurance costs for the 2026 fiscal year. He noted that half of his employees opt out of coverage due to the rising costs, stating, “There’s not a lot we can do, as we don’t have enough employees to spread out the costs.”

The KFF survey indicates that employees contribute an average of $6,850 for family coverage and $1,440 for individual plans. Additionally, more than one-third of covered workers are now enrolled in plans with deductibles exceeding $2,000, a stark rise of 32% over the last five years.

The report links the escalating costs directly to rising expenses for drugs and hospital services, which show no signs of easing. As KFF warns, the trend of increasing premiums is expected to continue into 2026 unless employers can find ways to offset these costs through changes in benefits or cost-sharing structures.

Concerns are mounting over the high prices of GLP-1 drugs used for weight loss, which many companies have started to cover. Gary Claxton, a senior vice president at KFF, stated, “Large employers know these new high-priced weight-loss drugs are an important benefit for their workers, but their costs often exceed their expectations.”

With nearly half of large employers acknowledging that their employees harbor “moderate” to “high” concerns about the rising costs of their health plans, the pressure is mounting. The KFF report also highlights that while insurance costs have surged, attention on these issues has dwindled in Congress, especially as lawmakers negotiate budget cuts impacting Medicaid, which serves 70 million low-income and disabled Americans.

Looking ahead, the standoff in Congress could have dire implications for health coverage. Without action to extend tax credits currently assisting 22 million individuals accessing ACA plans, premium costs could double starting in January.

Stay tuned for further updates as the situation evolves, impacting millions of workers and their families across the nation. The KFF report is based on a survey of 1,862 non-federal public and private employers with ten or more workers, underscoring the urgent need for comprehensive solutions to the escalating crisis in health insurance costs.