A new car or health insurance? Average coverage based on family employment reaches $27,000

As the federal shutdown enters its fourth week, sparked by an impasse over the cost of health insurance for 22 million Americans in Affordable Care Act plans, a new report shows that more than 154 million people with coverage through an employer are also facing steep price hikes — and the situation is likely to get worse.

Job-based health insurance premiums increased 6% in 2025 to an average of $26,993 per year for family coverage, according to an annual survey of employers released Oct. 22 by KFF, a nonprofit health news organization that includes KFF Health News.

This is the first time in two decades that the cost of supporting a family of four has increased by 6% or more for three consecutive years, according to KFF data.

Over the past five years, the average premium for family coverage has increased 26 percent, compared with a 29 percent increase in worker wages and nearly 24 percent growth in inflation. The average cost of family coverage is now about the same as a new Toyota Corolla hybrid.

The average annual premium for an individual health plan offered by employers increased 5% to $9,325, almost $3,000 more than in 2016, according to the survey.

“It’s concerning because health care costs continue to rise,” said Eric Trump, controller at Steve Reiff Inc., a small company in South Whitley, Ind., that specializes in sandblasting and painting heavy equipment.

Trump, who is not related to President Donald Trump, said his company’s health insurance costs rose 8% for fiscal 2026, about the same as in recent years.

Reiff workers pay about half the cost of their health coverage. About half of his current 20 employees decline insurance because they are covered by a family member or choose not to be insured, he said. “There’s not much we can do because we don’t have enough employees to spread the costs.”

Most people with workplace insurance contribute to the cost of their premiums, with the average worker this year contributing $1,440 for individual coverage or $6,850 for family coverage.

Over time, more and more workers have paid higher and higher deductibles, or the amount they must pay out of pocket for medical services before their insurer steps in. More than a third of covered workers are enrolled in a plan with a deductible of $2,000 or more for an individual. The proportion of workers benefiting from such a plan has increased by 32% over the past five years and by 77% over the past ten years, the report says.

Rising drug and hospital costs are often cited as the primary cause of rising health insurance costs, and neither shows signs of ebbing.

“Early reports suggest that cost trends will be higher for 2026, which could lead to higher premium increases unless employers and plans find ways to offset higher costs through changes to benefits, cost sharing or plan design,” the KFF survey said.

A big concern among employers is the high price of GLP-1 weight loss drugs, which a growing number of companies cover. Their high prices, combined with high demand, have led some workplaces to tighten or eliminate weight loss coverage.

“Large employers know that these expensive new weight-loss drugs are an important benefit to their workers, but their costs often exceed their expectations,” study author Gary Claxton, senior vice president of KFF, said in a press release. “It’s not surprising that some are rethinking access to weight loss medications.”

Employers typically respond to rising health care costs by shifting the costs onto their workers, but it is unclear how much more financial hardship workers can endure. The survey found that nearly half of large employers said their employees were “moderately” or “highly” concerned about their level of cost sharing.

While the rising cost of employer-sponsored insurance has outpaced general inflation, the issue has received little attention in recent months on Capitol Hill. To help finance the expanded tax cuts, the Trump Tax and Spend Act cuts by billions of dollars the amount the government spends on Medicaid, the state-federal health insurance program for 70 million low-income and disabled people. Congressional budget officials predict that cuts to Medicaid will leave millions more people uninsured over the next decade.

The federal government has been shut down since Oct. 1, with Democrats refusing to vote for a new spending measure unless Republicans agree to expand tax credits that help about 22 million people buy health coverage through the ACA marketplaces. Without action from Congress, tax credits will expire and premiums will double for many consumers starting in January.

The KFF report is based on a survey this year of 1,862 randomly selected public and nonfederal private employers with 10 or more workers.