Health Insurance Costs Skyrocket for U.S. Workers in 2025
American families are feeling the pinch as health insurance premiums hit a new high in 2025. According to a major new survey by KFF (Kaiser Family Foundation), the average annual cost of employer-sponsored family coverage has surged to $27,000—placing unprecedented financial strain on both workers and businesses.
Who’s Paying the Price?
While employers still shoulder about 75% of the tab, workers are increasingly bearing the burden through higher premiums, steeper deductibles, and out-of-pocket expenses. On average, employees now contribute $6,850 annually—nearly $600 per month—just for family coverage. For many, that’s before they even see a doctor.
“They are left holding the bag,” said Lisa Hunter of United States of Care, a nonpartisan health advocacy group. “Employees have no option to pass these costs on—they just absorb them.”
Small Businesses Hit Hardest
The pain is especially acute for workers at small companies. More than a quarter of employees at firms with fewer than 200 staff pay at least $12,000 a year toward premiums. Over half face deductibles of $2,000 or more.
Worse still, only 54% of small employers with 10–49 workers even offer health benefits in 2025—a sharp decline from previous years. Many are turning to “level-funded” plans that exclude essential benefits and shift risk onto the traditional insurance pool.
By the Numbers: 2025 Health Insurance Trends
| Category | 2025 Data |
|---|---|
| Average family premium | $27,000 |
| Worker contribution (avg) | $6,850/year |
| Small biz workers paying ≥$12K | 27% |
| Small firms offering coverage | 54% (10–49 employees) |
| Large firms covering GLP-1 drugs | 43% (up from 28% in 2024) |
The GLP-1 Drug Factor
A surprising driver of rising costs? Weight-loss medications like Wegovy and Ozempic. Nearly half of large employers now cover these GLP-1 drugs, and more workers are using them than anticipated—sending pharmacy budgets soaring. To manage expenses, companies are adding hurdles: mandatory dietitian visits, therapy sessions, or strict eligibility criteria.
“Traditional cost-sharing tools don’t work for $1,000-a-month drugs,” noted Paul B. Ginsburg of USC. “Workers simply can’t afford their share.”
What This Means for Everyday Families
With health costs consuming nearly 10% of median household income, many Americans are skipping care altogether. “People use less care, they have more medical debt, and they have more health problems,” said Sara R. Collins of the Commonwealth Fund.
For those without employer coverage, options are limited. Some small-business workers rely on Medicaid—even while employed—highlighting how essential public programs have become as private coverage shrinks.
No Relief in Sight
Experts warn 2026 could bring even steeper hikes. “We’re not seeing the picture of affordability getting any better,” Hunter said. “It’s looking more and more bleak.”
