The ongoing federal shutdown, now in its fourth week, has brought attention to the rising costs of health insurance in the US. A recent report by KFF, a health information nonprofit, reveals that over 154 million people with employer-sponsored health insurance face significant price hikes. The average premium for family coverage has increased by 6% to $26,993 per year, marking the first time in two decades that costs have risen by 6% or more for three consecutive years.
The report also shows that the average annual premium for individual health plans provided by employers has increased by 5% to $9,325. This is nearly $3,000 higher than in 2016. The cost of family coverage is now equivalent to the price of a new Toyota Corolla hybrid. Workers are also shouldering a larger burden, with the average worker contributing $1,440 for individual coverage or $6,850 for family coverage.
The rising costs are attributed to increasing drug and hospital costs, which show no signs of slowing down. Employers are responding by shifting costs to their workers, who are already feeling the pinch. The survey found that nearly half of large employers said their employees have “moderate” or “high” concerns about their level of cost sharing.
The report highlights the challenges faced by small businesses, which struggle to absorb the rising costs of health insurance. Eric Trump, controller at Steve Reiff Inc., a small company in Indiana, noted that his company’s health insurance costs rose 8% for the 2026 fiscal year, and that about half of its employees decline the insurance due to the high costs.
The issue of rising health insurance costs has received little attention on Capitol Hill, despite its significant impact on millions of Americans. The federal government’s shutdown has been sparked by a stalemate over the cost of health insurance for 22 million Americans on Affordable Care Act plans. The KFF report is based on a survey of 1,862 randomly selected nonfederal public and private employers with 10 or more workers. As the cost of health insurance continues to rise, it remains to be seen how employers and employees will respond, and what solutions will be implemented to address this growing concern.