As the federal government shutdown stretches into its fourth week, Americans are feeling the pinch in unexpected ways. The stalemate in Washington over health insurance for millions on Affordable Care Act (ACA) plans has cast a long shadow, but the ripple effects are reaching far beyond the marketplaces. A newly released report from KFF Health News paints a stark picture: over 154 million Americans who receive coverage through their employers now face rising premiums and deductibles, threatening to stretch family budgets to the breaking point.
According to the survey of employers released Oct. 22, premiums for job-based family health coverage rose 6% in 2025, reaching an average of $26,993 per year. That’s the highest three-year increase in more than two decades, reflecting a troubling trend in the cost of healthcare. Over the past five years, the average premium has jumped 26%, outpacing wage growth and approaching the pace of inflation. To put it in perspective, families are now paying roughly as much for coverage as they would for a new Toyota Corolla Hybrid.
Individual coverage isn’t faring much better. The average annual premium for a single worker climbed 5% to $9,325, nearly $3,000 higher than it was in 2016. For workers and families, the cost of health insurance is no longer just an expense—it’s a significant financial commitment that rivals major household purchases.
Eric Trump, controller at Steve Reiff Inc., a small Indiana company specializing in sandblasting and heavy equipment painting, sees the impact firsthand. (No relation to the former president.) He explains that his firm’s premiums rose 8% for 2026, in line with recent years, with employees shouldering about half the costs. Many choose to decline coverage altogether if they can access health insurance through a spouse or parent. “There’s not much we can do,” Trump says. “With only 20 employees, we can’t spread costs out much further.”
Workers’ contributions add another layer of strain. On average, employees pay $1,440 per year for individual coverage and $6,850 for family coverage. Deductibles, meanwhile, continue to climb. More than one-third of workers with employer-based insurance now face individual deductibles exceeding $2,000, up 32% in just the last five years and 77% over the past decade. High deductibles, combined with soaring premiums, force families into difficult choices: pay more upfront for comprehensive coverage, or risk exposure with cheaper plans that carry massive out-of-pocket costs.
Rising drug prices, hospital expenses, and costly new treatments are primary culprits behind the increases. One particular headache for employers has been the proliferation of GLP-1 medications for weight loss. While employees highly value access to these drugs, their steep prices have caused some companies to reconsider coverage or limit access, highlighting the tension between offering competitive benefits and controlling costs.
“Large employers recognize the value of these medications for their workforce,” said Gary Claxton, senior vice president at KFF. “But costs often exceed expectations, forcing some companies to rethink coverage.”
The survey also reveals growing anxiety among workers about their cost-sharing responsibilities. Nearly half of large employers report that employees express moderate or high concern about out-of-pocket expenses, a sign that financial stress is now a common feature of employer-sponsored insurance.
Meanwhile, the broader policy landscape adds uncertainty. Medicaid funding cuts from recent tax and spending legislation are projected to increase the number of uninsured Americans, compounding the pressures already faced by families. Without action from Congress to extend ACA tax credits—which currently help about 22 million Americans—premiums on the marketplaces could double for some consumers as early as January.
KFF’s survey, conducted with 1,862 randomly selected nonfederal public and private employers with at least 10 employees, underscores a sobering reality: healthcare costs are outpacing wage growth, inflation, and most household budgets. Families are now forced to make stark choices—whether to put a new car in the driveway or cover the soaring costs of keeping everyone healthy.
In short, healthcare has become a major line item, rivaling mortgages, car payments, and tuition. The question facing millions of American families isn’t hypothetical anymore: what can you afford, and what will you sacrifice?