Health and Medical Insurance Carriers NAICS 524114

Oct 15, 2025 - Employer Health Insurance Costs Climb Higher

• Employer‑based US health insurance premiums are projected to rise 6 % to 7 % in 2026, according to a Mercer survey. Rising costs are driven by factors including higher spending on specialty drugs, increased demand for both medical and mental health services, high healthcare staffing costs, and general medical cost growth. Employers are grappling with these increases, which affect both their budgets and employees’ out‑of‑pocket expenses. Many are considering strategies such as increasing employee cost‑sharing, redesigning benefit plans, and implementing wellness and preventive programs to help offset rising premiums. Small and mid‑sized employers may feel the pressure more acutely, as premium increases take up a larger share of overall compensation costs. These trends could exacerbate financial strain on workers and potentially affect corporate retention and hiring.
• About 300 rural hospitals face possible closure due to Medicaid cuts in the 2025 budget reconciliation bill, according to an analysis by the Cecil G. Scheps Center. More than 20% of Americans live in rural areas where Medicaid covers 1 in 4 adults, per non-profit KFF, and those hospitals have long operated on thin margins as Medicaid increasingly fails to cover their costs. The American Hospital Association says that in 2023 rural hospitals already received $28 billion less from Medicaid than the cost to treat patients. The reconciliation bill cuts a program that helps states fund Medicaid payments to healthcare providers, and despite a provision that offers up to $50 billion for five years to offset the cuts, rural hospitals have sounded the alarm that it is not enough. About 36 states will lose $1 billion or more in rural hospital Medicaid funding because of the bill, according to KKR.

• The uninsured rate for health coverage in the US is around 8.2%, or about 27 million people (per the Kaiser Family Foundation), a number that could grow by more than 10 million this year from the controversial reconciliation package passed by Congress in mid-2025. The Congressional Budget Office’s (CBO) analysis of the reconciliation bill, part of which makes changes to Medicaid eligibility, found it will significantly increase the number of uninsured Americans. It will boost uninsured rates by 3% or higher in about 16 states, per the CBO, with the biggest jumps expected in California, Florida, Texas, New York, and Illinois. Also problematic is the health insurance tax credits under the Affordable Care Act scheduled to expire at the end of the year, which the CBO estimates could cause the number of uninsured Americans could go as high as 26 million and force up uninsured rates in 35 states.
• Health and medical insurance industry sales grew 10% over the year prior to $3.1 billion in 2024, according to the Bureau of Labor Statistics, driven by a boost in enrollment in insurance Marketplaces. Health insurance bought through the Affordable Care Act’s Marketplaces rose 31% in 2024 to cover a total of 21.4 million people. The bump largely comes from customers buying Marketplace coverage after a COVID-era rule requiring states to keep Medicare patients in the exchanges, even if they would have been disenrolled due to eligibility, ended in early 2023. Lower-income customers drove the gains (they were most likely to be disenrolled from Medicaid), with a 54% rise in enrollment among applicants with household incomes between 100% to 150% of the US poverty level. In addition, Medicare Advantage is growing in popularity with 31 million seniors enrolled in the program, helping to boost overall industry revenue.