Family premiums hit almost $27K

For the report, KFF surveyed 1,862 randomly selected nonfederal public and private employers with 10 or more workers.

They found that premiums for job-based health insurance increased 6% in 2025 to an average of $26,993 a year for family coverage, marking the first time in 20 years that the cost of coverage for a family of four has increased by 6% or more for three consecutive years.

Over the past five years, the average premiums for family coverage have increased by 26% compared to a 29% increase in wages and a nearly 24% increase in inflation.

Meanwhile, the average annual premium for an individual health plan provided by employers increased by 5% to $9,325, which is almost $3,000 higher than it was in 2016, KFF found.

Most people with employer-based health insurance contribute to the cost of their premiums, and KFF found the average worker in 2025 contributed $1,440 for individual coverage or $6,850 for family coverage.

Little relief expected in the future

"We're not seeing the picture of affordability getting any better," said Lisa Hunter, senior director of federal policy and advocacy for United States of Care, a nonpartisan advocacy group in Washington, D.C. "It's looking more and more bleak."

The problems cited as reasons for increasing health insurance prices, such as high drug and hospital costs, don't show any signs of future change.

"Early reports suggest that cost trends will be higher for 2026, potentially leading 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 report said.

One major concern among employers is the high price of GLP-1 medications for weight loss, which an increasing number of companies cover. Those high prices, combined with strong demand, have led to some workplaces tightening or eliminating weight loss coverage.

"Large employers know these new high-priced weight-loss drugs are an important benefit for their workers, but their costs often exceed their expectations," said Gary Claxton, an author on the report and KFF SVP. "It's not a surprise that some are rethinking access to the drugs for weight loss."

"There is a quiet alarm bell going off," said KFF CEO Drew Altman. "With GLP-1s, increases in hospital prices, tariffs, and other factors, we expect employer premiums to rise more sharply next year."

Premiums are also slated to be affected by expiring subsidies for Affordable Care Act (ACA) plans at the end of the year, an issue that sparked a government shutdown at the start of October, with Democrats refusing to vote on any government-funding legislation unless ACA subsidies are extended and Republicans insisting on having separate negotiations after reopening the government.

According to an analysis of preliminary rate filings by KFF, premiums nationwide are set to rise by 18% on average and the average ACA marketplace consumer will pay $1,904 in annual premiums next year, up from $888 in 2025, if the subsidies aren't extended.

The potential for increasing health insurance costs has most U.S. adults concerned, according to a recent poll from the Associated Press and NORC.

According to the poll, around 60% of Americans said they're "extremely" or "very" concerned about health costs increasing in 2026, and around 40% of Americans are "extremely" or "very" concerned about being unable to pay for healthcare or medications they need, being unable to access healthcare when they need it, or losing or not having health insurance.