America’s Health Care Tax Rises Faster than Inflation for 3rd Straight Year
- chuckmelendi
- Oct 10
- 3 min read
Updated: 7 days ago
The cost of health insurance rose steeply for the third year in a row in 2025, reaching just under $27,000 for a family plan, according to an annual survey from the nonprofit Kaiser Family Foundation, which provides the broadest picture of U.S. employer health coverage. The cost is rising faster than inflation, and economists and business leaders said it could bite into employment and wage growth.
“If healthcare costs go up faster than the economy in general, that means there’s less money left over to go to wages,” said Gary Claxton, a senior vice president at KFF. Over the past few years, the KFF data signals an emerging falloff in the number of small companies providing health benefits to employees. You can see in the graph below that since 2022, overall inflation and workers’ earnings have fallen while health insurance premiums rise.
“If you are an employer who wants to take care of your employees, health insurance has become a real nemesis,” said Kyra Hollowell Morris, a certified financial planner in Mount Pleasant, S.C.
Morris says her firm now spends 9% of gross revenue on medical insurance, and she doesn’t offer a traditional employer plan. Instead, the company provides health reimbursement accounts that workers can tap to pay their own premiums. “It’s become more and more difficult,” she said.
J.H. Berra Paving Co., in St. Louis, is struggling with this trade-off. The company is facing a 15% health-insurance rate increase this year, on top of last year’s increase, said John O’Connor, a risk manager for the company. That extra cost is likely to put a lid on wage increases for the company’s workers, O’Connor said.
Small employers are facing some of the sharpest health-rate increases. More than half of small-business owners reported that health-insurance costs increased by 10% or more this year, according to a survey of 336 small businesses conducted in October by Vistage Worldwide, a business-coaching and peer-advisory firm.
The cause? Insurers and employers point to rising rates of conditions including cancer in the working-age population. Hospital prices have also grown in recent years, as healthcare providers have negotiated higher rates in their contracts.
However, if you look at insurers financial results, it looks to me like these cost increases on Americans and their employers is simply feeding the financial expectations of Wall Street.
Elevance Health kicked off another round of earnings reports for major insurers Tuesday morning, posting double-digit year-over-year growth for both revenue and profits. Elevance Health, Inc. (formerly known as Anthem, Inc.) is a publicly‑traded company operating in the “Managed Healthcare / Insurance” industry. Through its subsidiaries, it offers commercial health insurance, Medicare, Medicaid, pharmacy services, etc.
The results surpassed Wall Street's forecasts on both earnings and revenue, per Zacks Investment Research. Revenues across the first three quarters of 2025 were $149.4 billion, according to the earnings report, an increase of 13.5% year over year.
Elevance isn’t even one of the big boys (hello United, Cigna and Aetna), but it must be nice to be able to name your price increases every year at the expense of the rest of the economy. It begs the question of when will our law makers in Washington wake up and change this warped system that sees all Americans and their employers making a handful of health insurance companies rich beyond belief.
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By Paige Minemyer Oct 21, 2025
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