Memorandum
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- Derek Weston via TIME.com
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- Economy·4 min to read
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Rising Health Costs Push More U.S. Workers to Drop Coverage
ReRising Health Costs Push More U.S. Workers to Drop Coverage
The share of working-age Americans without health insurance rose to 11.2% in 2026, up from 8.9% in 2024, as premiums and deductibles climb and employers pass more costs to workers.
The share of working-age U.S. adults without health insurance climbed to 11.2% in 2026 from 8.9% in 2024, according to new research from the Commonwealth Fund, as rising premiums and deductibles push even people with access to employer-sponsored plans to drop coverage. The trend is straining small businesses and feeding a cycle in which uncompensated care drives up prices for everyone.
Amber Kostka, who owns The Stockpot restaurant in Hampton Roads, Va., says she has tried to support her employees with health insurance, good wages and a 401k. But premiums have roughly tripled since the company began offering coverage in 2018, and even though she splits the cost with workers—about $400 a month for employees—more of them say they cannot afford it. About 35% of eligible employees now buy the employer-sponsored plan, down from 50% before COVID. «It’s just a cost thing, at the end of the day,» Kostka says. «You can’t stop paying for groceries.»
The retreat from coverage is not limited to small restaurants. Premiums on the Affordable Care Act marketplaces rose by an average of 58% in 2026 after Congress decided last year not to renew expiring subsidies, leaving some people to conclude that marketplace plans are out of reach. The result is a feedback loop: as more Americans go uninsured, hospitals provide more uncompensated care and pass those costs on through higher prices, making insurance more expensive and forcing more people to drop it.
«When providers have to provide a lot of uncompensated care, how do they make themselves whole? They raise prices,» says Beth Umland, director of employer research for Marsh, the health benefits consultant formerly known as Mercer. A Marsh survey of employers found they expect total health benefit costs per employee to rise 8.2% in 2027, the highest increase since 2003. Umland cites consolidation of health systems that gives some providers monopoly power in certain markets, lower government spending on public health programs that shifts costs to private plans, more doctors using AI scribes that help them bill for more services, an arbitration clause in the No Surprises Act that has added billions to costs, and expensive new treatments such as GLP-1 drugs. «This is starting to feel—‘unsustainable’ is the word you hear,» she says.
Workers are absorbing more of the burden. Employees are paying an average of about $7,471 annually toward premiums for employer-sponsored family health benefits this year, up 9% from 2025, according to a new KFF employer health benefits survey. Workers at small firms with fewer than 200 employees pay about $9,687 toward family coverage—$2,847 more than workers at larger firms. The average deductible for employer-sponsored plans has risen 34% over the past decade.
Some employers are changing tactics. Kostka recently switched from buying insurance outright to self-funding her plan, a move she could make because her employees are relatively young and healthy. But she knows a major diagnosis could end that arrangement. «It’s a little bit of a gamble right now,» she says. Jim Winkler, chief strategy officer of the Business Group on Health, whose recent survey projected a 9% rise in health care costs in 2027—the highest the group has recorded—says some employers are dropping coverage for GLP-1s for weight loss, steering workers toward highly rated Centers of Excellence, and reimbursing employees who find cheaper legitimate medications rather than relying on pharmacy benefit managers.
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