Why health insurance premiums are rising, according to experts

Experts warn that employer-provided health insurance premiums in the United States are poised for a significant increase next year, with workers facing higher out-of-pocket costs. The average family healthcare plan currently costs $28,303 per year, marking a 5% rise from 2025, according to an analysis by the Kaiser Family Foundation (KFF). Workers typically contribute about 9% more than the previous year, equating to roughly $7,470 annually.

Matthew Rae, an associate director at KFF's healthcare marketplace program, notes that many people with job-based coverage are struggling to afford these rising costs. Overall, Americans pay high prices for healthcare, both relative to actual costs and compared to other developed nations. While inflation, wages, and healthcare premiums have all increased consistently over the past five years, workers have consistently contributed around a quarter of the premiums for their employer-provided family health insurance.

Several factors contribute to the rising cost of healthcare. Health spending accounted for 91% of the growth in average premiums between 2011 and 2024, primarily due to higher prices set by providers and pharmaceutical companies. There is limited antitrust regulation, allowing hospitals and physicians to consolidate and increase prices, especially when they were once competitors.

The aging population, increased chronic conditions, and higher utilization of prescription drugs, particularly GLP-1 agonists for weight loss, also play significant roles in driving up healthcare spending. These factors, combined with the lack of effective market competition, make it challenging to control healthcare premiums effectively.