Healthcare spending now consumes "almost 1 out of every 5 dollars spent in the U.S.," accounting for about 18% of the economy, according to multiple sources. Total healthcare spending increased to $5.3 trillion in 2024—up 7.2% over 2023, according to Reuters.
The trajectory isn't improving. According to Aon, healthcare costs for U.S. employers will increase by 9.5% in 2026, as reported by HR Dive.
"Healthcare 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," said Emma Wager, Senior Policy Analyst at KFF, via The Guardian. "It's an expense that is unpredictable and that we all face."
American pessimism about healthcare affordability has reached record levels.
According to Gallup, 47% of U.S. adults say they're worried they won't be able to afford necessary healthcare in the coming year. Twenty percent of Americans say they or someone in their household couldn't pay for prescription medications in the past three months. Thirty percent 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," said Timothy Lash, President of West Health, via The Guardian.
Almost a quarter (23%) of Americans believe the U.S. healthcare system is in "crisis." Just 16% say they're satisfied with the cost of healthcare in the country, and 29% cite healthcare cost as the most urgent national health problem.
Costs for employer-sponsored coverage continue climbing faster than wages or general inflation.
In 2025, the average annual premium for employer-sponsored family healthcare coverage hit $26,993—a 6% increase over 2024, according to the Kaiser Family Foundation. Workers are contributing an average of $6,850 toward the cost of family coverage.
Employers are responding by shifting more costs to employees. According to Mercer, 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.
"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," said Paul Fronstin, Ph.D., Director of Health Benefits Research at the Employee Benefits Research Institute, via EBRI.
The impact on small businesses is even more stark. 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.
On January 1, the "enhanced tax credits" that many Americans used to reduce health insurance costs expired, creating immediate financial pressure for millions.
Approximately 24 million Americans buy health insurance through the ACA marketplace, and the majority had become accustomed to receiving tax credits to lower their monthly premiums. Those most impacted are Americans who don't get 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 to help fill the gap.
According to The Wall Street Journal, monthly health insurance costs are surging for middle-income earners who have come to rely on the ACA marketplace. For some Americans, health insurance premiums now exceed 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.
On January 15, the Trump administration announced a new healthcare plan aimed at lowering costs, according to NBC News and The White House.
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 government is going to pay the money directly to you," the administration stated. "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."
The plan calls for direct payments to consumers who would then purchase their own healthcare. However, experts say Congress would need to act to implement direct payments, and critics call the proposal vague, noting that "when it comes to health reform, the devil is in the details, and this is very light on details."
New research suggests that covering expensive GLP-1 medications could actually reduce employers' healthcare costs over time.
Aon tracked data from more than 50 million people, including 192,000 GLP-1 users, for over two years, according to HR Dive. 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' overall costs.
Currently, just under a quarter (23%) of U.S. employers cover GLP-1 medications. Aon says coverage could "become a part of an organization's talent strategy" and that "thoughtful GLP-1 strategies" can "improve outcomes for their workforce."
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