American workers are paying more for health care and getting less in return, as rising premiums eat into wages and leave families with larger bills. New survey data shows health costs climbing faster than pay, and the trend is now shaping how workers feel about their finances.
The average annual premium for employer-sponsored family coverage reached $28,303 in 2026, according to the KFF Employer Health Benefits Survey released in October. That was 5 percent higher than the year before, as health costs kept climbing faster than wages. Workers paid an average of $7,471 of that total, a rise of 9 percent, while their earnings rose 3.7 percent and inflation ran at 2.7 percent.
The figures land as open enrollment begins and as health insurance becomes a central issue in the midterm election. For many households, the cost of coverage now rivals rent or a car payment, and the gap between what employers pay and what workers owe keeps widening. The choices families make in open enrollment will set their monthly bills for the year ahead.
How health costs are holding back pay
The squeeze from health costs shows up in pay packets as well as in premiums. Wages and salaries rose 3.1 percent in the third quarter from a year earlier, according to the employment cost index published by the Bureau of Labor Statistics. Over the same period, employer health insurance contributions jumped 6.4 percent, matching the fastest pace in two decades.
Guy Berger, an economist and senior fellow at the Burning Glass Institute, calculated that wage growth would be about 0.2 to 0.3 percentage points faster today if employer contributions had grown at 3 percent, the pace of a few years ago. He wrote in a Substack post that the data probably understates the pressure on workers, because employer contributions may not be keeping pace with the full rise in health costs.
“In other words, employees are paying a bigger share of premiums,” Berger wrote. He added that insurance plans are also covering less, which forces workers to pay more expenses out of pocket. The result is a double hit: smaller raises and larger bills for the same care.
Premiums outpace wages
Workers have felt the gap from rising health costs widen over several years. Their premium contributions rose 26 percent between 2021 and 2026, compared with 12 percent from 2016 to 2021, according to the KFF survey. The share of workers enrolled in plans with deductibles of at least $2,000 rose from 34 percent to 38 percent, so more people pay the first share of their care themselves.
The average premium for single coverage reached about $9,800, the survey found. Employers pointed to higher medical costs, including cancer treatment and weight-loss drugs, as factors behind the increases. Those health costs feed straight into the premiums workers see in open enrollment.
Marketplace health costs climb again
People who buy their own coverage face even sharper rises in health costs. Premiums for Affordable Care Act plans will rise 13 percent in 2027, according to KFF, drawing on federal data. That is the second-biggest increase since 2018, and it follows a 26 percent jump in 2026. The average monthly premium for a 40-year-old buying a mid-tier plan will be $704.
Enrollment has already fallen. As of February, the number of people in Affordable Care Act plans had dropped 12 percent from a year earlier, or about 19.2 million people, and insurers have said more have left since. KFF counted 31 state-level departures by insurers from the marketplace as of late October, against eight additions.
What comes next for workers
Employers expect health costs to rise by an average of 8.2 percent in 2027, according to personal finance writer Suze Orman, and much of that increase is likely to be passed on to workers. Open enrollment choices made this month will set what many households pay for the year ahead.
For now, the numbers point in one direction: health care takes a larger share of what American workers earn, whether the bill arrives as a premium, a deductible or a smaller raise than they might otherwise have had.