(The Hill) – The cost of employer-sponsored health insurance rose for the third year in a row in 2025, approaching an average of almost $27,000 for a family plan, according to an annual survey from KFF released Wednesday.
Family premiums are up 6 percent, or $1,408, from last year, more than double the rate of inflation and similar to the 7 percent increase recorded in each of the previous two years.
On average, workers contributed $6,850 annually to the cost of family coverage, with employers paying the rest.
The annual survey of more than 1,800 small and large employers offers a snapshot of workplace-sponsored health insurance across the country. Nearly half the U.S. population — about 154 million people younger than 65 years — receive health care coverage through their job.
The large increase in premiums is being driven primarily by increased spending on health care. According to the survey, employers are singling out drug prices as a factor contributing to higher premiums in recent years.
Significant shares of firms also cited the prevalence of chronic disease, higher utilization of services and hospital prices.
Among firms with more than 200 employees, more than a third said prescription drug prices contributed “a great deal” to higher premiums in recent years. Chief among them are the popular GLP-1 drugs, which include the weight-loss treatments Wegovy and Zepbound.
Among the biggest firms — those with at least 5,000 workers — 43 percent said they cover GLP-1 drugs for weight loss in their largest plan, up from 28 percent in 2024.
“There is a quiet alarm bell going off. With GLP-1s, increases in hospital prices, tariffs and other factors, we expect employer premiums to rise more sharply next year,” KFF President and CEO Drew Altman said in a statement.
But the cost of health insurance is more than just premiums. The average deductible for an individual plan is now almost $1,900, compared to $1,773 last year. On average, workers at small firms face deductibles almost $1,000 higher than workers at larger firms.
More than half of covered workers at small firms now face a deductible of at least $2,000, and more than a third face an average single deductible of at least $3,000, the survey found.
KFF said it expects deductibles and other forms of cost-sharing may climb as companies look to push more costs of medical care onto employees.
“Employers have nothing new in their arsenal that can address most of the drivers of their cost increases, and that could well result in an increase in deductibles and other forms of employee cost sharing again, a strategy that neither employers nor employees like but companies resort to in a pinch to hold down premium increases,” Altman said.
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