American workers are increasingly leaving their employer-based health insurance plans to save as much as $1,000 per month, as the cost of coverage continues to climb. According to a Bloomberg report published Wednesday, employees paid an average of $6,850 towards their health insurance in 2025, marking an increase of nearly $1,300 since 2020.
Rising Premiums Drive Change
Health insurance premiums for employees have risen by more than $100 per month since 2020, pushing many to seek more affordable options. Jessica Balcerzak, a 33-year-old nurse from Buffalo, New York, told Bloomberg that she saved over $10,000 annually by dropping her employer's family health insurance plan in favour of a low-cost alternative.
The trend is reflected in national statistics. The percentage of employees enrolled in employer-based healthcare plans fell from 64% in 2020 to 61% in 2025, as reported last year by the healthcare research firm KFF.
Implications for Companies
This shift poses challenges for employers, who rely on a mix of healthy and less healthy participants to balance costs. When healthier individuals with fewer claims leave group plans, the remaining pool tends to be sicker, leading to higher premiums for all. A January report from Johns Hopkins University highlighted that this dynamic typically results in increased costs for policyholders with more health issues.
Marketplace Coverage Also Under Scrutiny
Concerns over health insurance costs extend beyond employer plans to the Health Insurance Marketplace, established under the Obama administration for those without employer-based coverage. An April analysis by KFF found that many Marketplace enrollees rated their insurance as "fair" or "poor" regarding monthly premiums and out-of-pocket expenses for doctor visits.
Limited Affordable Options
For individuals who cannot afford either employer or Marketplace coverage, affordable health insurance options are scarce. Short-term health insurance plans offer lower premiums but often come with high deductibles and may not comply with Affordable Care Act rules. This means they can deny coverage for pre-existing conditions, leaving policyholders vulnerable to significant out-of-pocket costs.
Another option is cost-share cooperatives, which pool premiums to cover medical expenses. However, these typically have minimum coverage costs and may exclude pre-existing conditions.
Future Outlook
The problem is expected to worsen. A 2025 Congressional Budget Office report predicts that recent policy changes to Medicaid and the Health Insurance Marketplace will result in 14 million people becoming uninsured by 2034.
However, dropping health insurance can backfire financially. KFF found that 59% of uninsured adults struggle to pay medical bills, compared to 30% of insured adults. Additionally, 62% of uninsured adults are likely to carry medical debt, versus 44% of those with insurance.
