New car vs health insurance? The average family function-based coverage is $27,000

As the federal shutdown enters its fourth week, due to a deadlock over the cost of health insurance for the 22 million Americans in Affordable Care Act plans, A new report appears And the more than 154 million people with coverage through their employer also face sharp price hikes — and the situation is likely to get worse.

Job-based health insurance premiums rose 6% in 2025 to an average of $26,993 a year for family coverage, according to an annual survey of employers released Oct. 22 by KFF, a health information nonprofit that includes KFF Health News.

This is the first time in two decades that the cost of covering a family of four has risen by 6% or more for three consecutive years, data from KFF shows.

Over the past five years, average family insurance premiums have risen by 26%, compared to a 29% increase in worker wages and inflation growth of approximately 24%. The average cost of family coverage now is about the same New Toyota Corolla hybrid.

The average annual premium for an employer-offered individual health plan rose 5% to $9,325 — nearly $3,000 higher than it was in 2016, according to the survey.

“It’s concerning because health care costs continue to rise,” said Eric Trump, controller of Steve Reeve, a small company in South Whitley, Indiana, that specializes in sandblasting and painting heavy equipment.

Trump, who is not related to President Donald Trump, said his company’s health insurance costs rose 8% for fiscal year 2026 — about the same as they have been in the past few years.

Reiff workers pay about half the cost of their health coverage. About half of its 20 current employees decline insurance because they get coverage through a family member or choose not to insure, he said. “There’s not much we can do because we don’t have enough staff to spread the costs.”

Most people with job-based insurance contribute to the cost of their premiums, with the average worker this year contributing $1,440 for individual coverage or $6,850 for family coverage.

Over time, more workers paid increasingly higher deductibles, which is the amount they have to spend out of pocket on medical services before their insurance company steps in. More than a third of covered workers are enrolled in a plan with a deductible of $2,000 or more per person. The report said that the percentage of workers with such a plan increased by 32% over the past five years and 77% over the past ten years.

High costs of medicines and hospitals Often cited As the main reason for rising health insurance costs, neither shows signs of abating.

“Early reports indicate that cost trends will be higher for 2026, which could lead to higher premium increases unless employers and plans find ways to offset higher costs through changes in benefits, cost-sharing, or plan design,” the KFF survey said.

One big concern among employers is the rising prices of GLP-1 weight-loss drugs, which a growing number of companies cover. Their high prices, coupled with strong demand, have led some workplaces to tighten or eliminate coverage for weight loss.

“Large employers know that these expensive new weight-loss drugs are an important benefit to their workers, but their costs often exceed their expectations,” study author Gary Claxton, vice president of KFF, said in a press release. “It is not surprising that some are rethinking access to weight-loss medications.”

Employers typically respond to rising health costs by shifting costs to their workers, but it is unclear how much workers can financially absorb. The survey found that nearly half of large employers said their employees had “moderate” or “high” concerns about the level of cost sharing.

Although rising costs of employer-sponsored insurance have outpaced the general inflation rate, the issue has received little attention in recent months on Capitol Hill. To help finance an extension of the tax cuts, Trump’s tax and spending bill cuts the amount the government spends on Medicaid, the federal-state health insurance program for about 70 million low-income and disabled people, by billions of dollars. Congressional budget watchers expect cuts to Medicaid to leave millions of people uninsured over the next decade.

The federal government has been shut down since Oct. 1 as Democrats refuse to vote for a new spending measure unless Republicans agree to extend tax credits that help about 22 million people buy health coverage through the ACA’s marketplaces. Without action by Congress, the tax breaks will expire, and insurance premiums will double for many consumers, starting in January.

The KFF report is based on a survey conducted this year of 1,862 randomly selected non-federal public and private sector employers with 10 or more workers.