Nov 16, 2025
Over the past five years, the price tag for a family health insurance plan has jumped by 26% (1).
Costs for health insurance have been increasing steadily since 2010. In fact, data from the Bureau of Labor Statistics shows that the price for medical insurance has increased nearly 50% in that time. (2)
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USA Today reports that the average cost for a family health insurance plan offered through the workplace was $26,993 in 2025. This is a 6% increase from a year ago, and the previous two years saw prices increase by 7% per year. (3)
And what’s worse, salaries aren’t keeping pace. Wages grew 4% year over year, and inflation is up 2.7% from a year ago.
Companies point to the cost of popular new diabetes drugs, sold off-label for weight loss, as a major factor for increasing costs. Chronic disease also contributed to rising insurance bills, as did higher use of medical services and increased hospital prices.
However, the report shows that the cost of deductibles for employees has also risen. A KFF report shows that approximately 3 in 10 workers are enrolled in high-deductible health plans, with an average deductible of $1,886. Deductibles have increased 17% since 2020, with many of those affected working for smaller companies (4).
So what can the average American do to afford coverage? Here’s how rising costs are affecting workers and employers, and what options families have to stay insured.
The impact of rising insurance costs
USA Today reports that other sources are projecting steeper price increases in 2026 (5).
Employers pay the bulk of health insurance costs. KFF reported that in 2025, workers paid $6,850 for their family plans while their employers paid $20,143, on average (6).
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"It's like buying a car every year just to cover a family of four," said Matthew Rae, associate director of KFF's health care marketplace program, in conversation with USA Today reporters. It's "an astronomical amount of money," he said (7).
Almost 154 million Americans and their families get coverage through the workplace. As costs rise across the board for daily living, families may struggle to afford the high co-pays, which can include $27 for a primary care doctor visit and $45 for a specialist. Deductibles can be as high as $2,631 for workers at companies who employ less than 200 people (8).
Increasing costs strain employers as well. Small businesses, which typically have smaller risk pools, are more vulnerable to sharp premium hikes, making it harder to offer competitive benefits.
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Health care options outside of employer plans
While most Americans get their insurance through work, many families rely on alternatives, and these options can offer relief when employer coverage becomes unaffordable.
About 24 million Americans are insured through the Affordable Care Act federal and state marketplaces (9). Workers can purchase individual policies during open enrollment, but premiums may be higher than employer-sponsored plans, depending on subsidies and the level of coverage selected.
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Some Americans of working age will also qualify for Medicaid programs if they are low-income, disabled or currently pregnant. This coverage is usually free or low-cost, and is worth looking into if you believe you may be eligible.
Vox reports a rise in health cost-sharing ministries, originally founded within Christian communities but now used by some secular households as well (10). These programs aren’t insurance; instead, members contribute monthly amounts into a pool that reimburses participants’ medical bills. They often come with lower monthly costs, but unlike traditional insurance, they aren’t required to cover specific services or pay claims, and members risk going uncovered if funds are depleted.
How to maximize standard employer health care benefits to save costs
Many people still rely on their employer for insurance, and understanding the structure of those plans can help families manage rising costs more strategically.
Most employer-sponsored plans come in tiered levels. Higher-tier plans generally offer lower deductibles and higher premiums, while lower-tier plans flip those costs. For most workers, choosing a plan depends on expected medical needs, prescription costs and whether hitting the deductible is likely. Employer coverage also tends to cost less than a Marketplace plan in raw premiums. A GAO report found that average monthly premiums for employer-sponsored plans were lower than Marketplace premiums in 2022 (11).
Some workers can save even more by pairing their plan with a Health Savings Account (HSA). HSAs let individuals save pre-tax money for qualifying medical expenses, grow those savings tax-free, and withdraw them tax-free, but only if they’re enrolled in a high-deductible health plan. For families who can afford to fund them, HSAs can offer significant long-term savings and help offset rising premiums or out-of-pocket costs.
Read More: Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it
How families can budget for rising health insurance costs
Planning ahead during open enrollment can keep health care from overwhelming your budget. Consider:
- Comparing plan tiers based on expected care needs, including medications, mental health visits, and chronic conditions.
- Using an HSA or FSA (if offered) to set aside pre-tax dollars for health expenses.
- Reviewing your employer’s wellness incentives, such as premium discounts for preventive care or screenings.
- Estimating total annual costs, not just premiums, including co-pays, deductibles, prescriptions and out-of-network fees.
- Adjusting your household budget early if premiums are rising next year, so you aren’t hit with a surprise increase in January.
With premiums rising faster than both wages and inflation, taking full advantage of employer benefits, comparing available coverage options, and rerunning your financial plan during open enrollment can help your family stay protected without letting health insurance overwhelm your finances.
Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
USA Today (1), (3), (5), (7), (9); FRED (2); KFF (4), (6), (8); Vox (10); GAO (11)
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Rebecca Holland is dedicated to creating clear, accessible advice for readers navigating the complexities of money management, investing and financial planning. Her work has been featured in respected publications including the Financial Post, The Globe & Mail, and the Edmonton Journal.
