Health insurance premiums for families in the United States have reached alarming new heights, with costs for employer-sponsored plans surpassing $26,000 in 2025. This financial strain is not only affecting employers but also placing a heavy burden on workers, many of whom are now paying significantly more toward their coverage. With no relief in sight, this upward trajectory in healthcare costs has sparked concern across the nation.
According to a new survey by the Kaiser Family Foundation (KFF), employers and employees are grappling with rising premiums and deductibles, further complicating access to essential healthcare. The majority of Americans under 65 rely on employer-sponsored insurance, but as costs climb, these plans are becoming less affordable for the average worker.
Premiums Reach Unprecedented Levels for Families
The average premium for family health coverage has climbed to nearly $27,000 in 2025, marking a 6% increase from the previous year, according to KFF’s annual survey of employers. Workers now contribute an average of $6,850 per year toward these premiums, which translates to nearly $600 per month. This financial strain is exacerbated by rising deductibles, which can result in thousands of dollars in out-of-pocket costs for employees in the event of serious illness or accidents.
While employers still cover the majority of these premiums, employees are increasingly sharing the cost burden through higher deductibles and premium contributions. KFF’s survey highlights that the trend of rising costs is expected to continue in the coming years, adding to the already significant financial stress faced by American workers.
Employers Struggle with Rising Drug Costs and Limited Coverage Options
One of the major contributors to rising premiums is the escalating cost of prescription drugs, particularly expensive new medications such as GLP-1 drugs used for weight loss. According to KFF, a growing number of large employers now cover these drugs, but the cost has exceeded expectations for many. Some have introduced eligibility restrictions, requiring employees to consult dietitians or therapists before receiving coverage for these medications.
While large employers with over 5,000 workers are more likely to offer coverage for these high-cost medications, smaller businesses are facing greater challenges. Smaller employers, especially those with fewer than 200 employees, often offer less comprehensive coverage, with employees shouldering a larger share of premiums and deductibles. More than a quarter of workers in small businesses contribute over $12,000 annually toward premiums, a burden that can be difficult to bear, especially in industries with lower wages or part-time workers.
The high cost of coverage and prescription drugs is prompting some employers to reconsider their benefits offerings. As the financial pressure mounts, many are faced with tough decisions about whether to maintain or reduce health insurance options for their workers.
