The ongoing federal shutdown, now in its fourth week, is rooted in a standoff over the cost of health insurance for 22 million Americans covered under the Affordable Care Act. However, a recent report reveals that over 154 million individuals with coverage through their employers are also facing significant price hikes, with the situation expected to worsen.
According to a recent survey by KFF, premiums for job-based health insurance surged by 6% in 2025, reaching an average of $26,993 annually for family coverage. This marks the first time in twenty years that the cost of insuring a family of four has risen by 6% or more for three consecutive years. Over the past five years, the average premium for family coverage has spiked by 26%, outpacing the growth in workers’ wages and inflation. In fact, the average cost for family coverage has now reached levels comparable to that of a new Toyota Corolla hybrid.
Individual health plan premiums provided by employers also saw a 5% increase, reaching an average of $9,325 annually, nearly $3,000 higher than in 2016. The escalating health costs are a major concern for companies like Steve Reiff Inc. in South Whitley, Indiana, where controller Eric Trump noted an 8% rise in health insurance costs for the 2026 fiscal year.
Employees at Reiff typically cover half of their health coverage costs, with some opting out due to alternative coverage options or choosing to go uninsured. With a small workforce of 20 employees, Trump expressed limitations in spreading out the escalating costs.
As healthcare expenses continue to rise, more workers are facing higher deductibles, with over one-third enrolled in plans with deductibles exceeding $2,000 for an individual. The surge in drug and hospital costs remains a significant factor contributing to the overall increase in health insurance expenses.
Employers are grappling with the high costs of GLP-1 drugs for weight loss, prompting some to reconsider coverage for weight loss treatments due to cost concerns. While employers typically shift rising health costs to their employees, the survey indicates that nearly half of large employers acknowledge their workers’ concerns over increasing cost-sharing arrangements.
Despite the substantial rise in employer-sponsored insurance costs outpacing general inflation, this issue has received limited attention in recent political debates. The federal government’s shutdown, triggered by disagreements over extending tax credits for ACA marketplace coverage, further complicates the healthcare landscape. Without congressional action, millions of individuals could face a doubling of premiums starting in January.
The findings of the KFF report, based on a survey of 1,862 nonfederal public and private employers, underscore the pressing challenges posed by escalating healthcare expenses. As stakeholders navigate the complex terrain of healthcare costs, the need for sustainable solutions to mitigate financial burdens on both employers and employees remains paramount.
