SPOTLIGHT: How rising healthcare costs are impacting workers and employers
Healthcare spending currently accounts for "about 18% of the U.S. economy," with "almost 1 out of every 5 dollars spent in the U.S." going to health care.
Healthcare spending in the U.S. increased to $5.3 trillion in 2024, up 7.2% over 2023.
According to Aon, “healthcare costs for U.S. employers will increase by 9.5% in 2026.”
HR Dive
[H]ealthcare is something that people can’t choose how much they’re going to buy, or how much they can really price-shop in most circumstances. It’s an expense that is unpredictable and that we all face."
47% of U.S. adults say they are "worried they won’t be able to afford necessary healthcare in the coming year," according to Gallup.
20% of Americans say "they or someone in their household couldn’t pay for prescription medications in the past three months."
30% of U.S. adults say a household member recently “skipped medical treatment due to cost.”
We’re at all-time highs in terms of concern around the current state of healthcare affordability."
In 2025, the average annual premium for employer-sponsored family healthcare coverage hit $26,993, a 6% increase over 2024.
Workers are contributing (on average) "$6,850 toward the cost of family coverage."
59% of employers plan to "make cost-cutting changes to their plans in 2026 — up from 48% making changes in 2025 and 44% in 2024," according to Mercer.
Higher costs are resulting in fewer small businesses offering health insurance. In 2023, just 30.1% of small businesses offered health insurance, down from 47.2% in 2000. The "average annual premium for small businesses" increased by 182% between 2000 and 2023.
If health insurance premiums rise faster than wages and general inflation … large employers … may respond by shifting costs to employees through higher deductibles, coinsurance, or restricted networks."
Almost a quarter (23%) of Americans "believe the United States healthcare system is in "crisis."
Just 16% of Americans say they are "satisfied with cost of healthcare in U.S."
According to Gallup, 29% of Americans "cite healthcare cost as most urgent national health problem."
On January 1, the "enhanced tax credits" that many Americans used to reduce the cost of health insurance expired.
Approximately 24 million Americans "buy health insurance through the ACA marketplace." The majority of those that do had become "used to receiving tax credits to lower the monthly price."
Most impacted are those Americans who "don't get their health insurance from an employer and don't qualify for Medicaid or Medicare — a group that includes many self-employed workers, small business owners, farmers and ranchers."
Six U.S. states (California, Colorado, Connecticut, Maryland, Massachusetts and New Mexico) have expanded their own state-funded ACA subsidies.
According to The Wall Street Journal, monthly health insurance costs are surging for "middle-income earners" who have come to "rely on Obamacare." For some Americans, health insurance premiums far exceed even their mortgage payments.
An American couple earning a combined $110,000 (400% of the federal poverty level) is part of the “group … hardest hit by the expiring subsidies.”
Should employers cover expensive GLP-1 medications? According to a new study by Aon, doing so could reduce employers' healthcare costs.
Highlights from Aon's multi-year study:
Aon tracked data of "more than 50 million people, including 192,000 GLP-1 users, for a little over two years."
The study found that "consistent use" of GLP-1s "correlates with lower medical cost growth and fewer hospitalizations for cardiovascular events."
Over time, "workers' sustained use" of GLP-1s can "reduce employers’ costs."
According to a recent survey, just under a quarter (23%) of U.S. employers currently cover GLP-1s.
Aon says that coverage of the medications could "become a part of an organization’s talent strategy," and that "thoughtful GLP-1 strategies" can “improve outcomes for their workforce.”
Read more via HR Dive
On January 15, the Trump administration announced a new healthcare plan aimed at lowering health care costs.
According to The White House, the "Great Healthcare Plan" is "a broad healthcare initiative that will slash prescription drug prices, reduce insurance premiums, hold big insurance companies accountable, and maximize price transparency in the American healthcare system."
The plan calls for direct payments to be made to consumers, who would, in turn, purchase their own healthcare.
The government is going to pay the money directly to you. It goes to you, and then you take the money and buy your own healthcare… the big insurance companies lose and the people of our country win.”
Experts say Congress would need to act to implement direct payments.
Critics call the proposal vague, saying that “when it comes to health reform, the devil is in the details, and this is very light on details.”
Read more via NBC News, The White House
2025 Employer Health Benefits Survey, via Kaiser Family Foundation
Employers prepare for the highest health benefit cost increase in 15 years, via Mercer
How Rising Healthcare Costs Have Caused Small Businesses to Eliminate Benefits, via TakeCommandHealth
Employment-Based Health Insurance Remains Leading Coverage Source for Working-Age Americans, but Small Employers Continue to Pull Back, via EBRI
Health Care Costs and Affordability, via Kaiser Family Foundation
US healthcare spending soars to over $5 trillion in 2024, via Reuters
How Do Americans Experience Healthcare in Their State?, via Gallup
Cost Leads Americans' Top-of-Mind Healthcare Concerns, via Gallup
Some states expand ACA subsidies as federal tax credits lapse, via CBS News
2026 price hikes hit ACA health insurance plans as subsidies expire for millions of Americans, via CBS News
Americans brace to start New Year without healthcare, via BBC
‘A state of crisis’: record number of Americans are pessimistic about US healthcare system, via The Guardian
Health Insurance Is Now More Expensive Than the Mortgage for These Americans, via The Wall Street Journal
Why cover GLP-1s? They’ll lower employer healthcare costs, study says, via HR Dive
