How the Rising Cost of Health Insurance Is Hitting Companies and Workers

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Alex Ossola (0:18)

A family health plan now costs almost $27,000. That's tough on employers providing the health benefits and on their workers too.

Anna Wilde Mathews (0:26)

If the cost of health coverage is going up a lot, this can put a lid on, say, salary increases for workers because that money is really having to go over to pay for the health benefits.

Alex Ossola (0:37)

Plus, what we know about a US plan to split Gaza in two. And meet the warehouse robots and AI tools that could make Amazon more efficient. It's Wednesday, October 22nd. I'm Alex Ossola for The Wall Street Journal. This is the PM Edition of What's News, top headlines and business stories that move the world today. Today, Amazon unveiled new warehouse robots and AI tools that could lead to a future where its human workers are more efficient and also less necessary. One new technology Amazon is preparing for its warehouses or delivery vans is a robot arm called BlueJ that sorts packages. Here's the chief technologist at Amazon Robotics, Ty Brady, speaking at the company's event today.

Ty Brady (1:24)

Hundreds of millions of different objects that BlueJ can not only pick but they can also identify. And over time, it will serve as core technology underpinning the expansion of our same day delivery network. That's a big deal for us.

Alex Ossola (1:38)

There's also a new artificial intelligence agent meant to help human managers move workers around and avoid bottlenecks. And augmented reality glasses would help drivers grab the right package to deliver and give turn by turn directions for package drop-offs. Amazon says its goal is to improve safety and offload mundane tasks to AI and robots. It's investing in training workers to teach them to manage robots. Around three-quarters of Amazon's deliveries are already assisted by robots, the company says. And analysts expect Amazon will see billions of dollars in cost savings every year as it automates more of the logistics process.

The cost of health insurance has now risen sharply for the third year in a row, with the national average for 2025 reaching just under $27,000 for a family plan if you get your insurance through your employer. KFF, a nonprofit, surveys US employers every year to get those numbers. This year, costs rose 6% after climbing 7% for the past two years. Healthcare costs are rising faster than inflation, and economists and business leaders said that could bite into jobs and how much workers get paid. Anna Wilde Mathews covers health insurance for the Journal and is here now with more. Anna, what's driving up the cost of health insurance?

Anna Wilde Mathews (2:59)

The biggest driver for health insurance costs going up is really that healthcare spending is going up. There are a lot of reasons for that. Insurers and employers have said to me they're seeing rising numbers of working age people having conditions like cancer that can really drive the need for a lot of care. Another factor is that prices for certain things, including hospital services, have been going up. Hospitals have been pushing for higher rates as their own costs have been going up. And then a final thing is just new and emerging therapies. And a big item in that category is the GLP-1 drugs, the weight loss drugs such as Wigovie, that can also be costly.

Alex Ossola (3:39)

I know from my own health insurance that employers are primarily covering that premium cost. But how is that getting passed on to employees?

Anna Wilde Mathews (3:47)

So the lion's share of the premium for an employer plan is typically paid by the employer. But as the cost of the plan goes up, if the amount or the share of that that the employee is paying remains constant, obviously the employee sees a growing bite out of their paycheck for that premium. In addition, employers do pass on costs to employees through out-of-pocket charges. So that stuff like deductibles, like your co-pays, things that you pay when you access care. And so that cost is also somewhat been ticking up for employees.

Alex Ossola (4:23)

I'm curious what the broader impact is on businesses. I mean, if they are having to pay more just to cover their employees' health insurance, does that mean that they have to look for other places to cut costs?

Anna Wilde Mathews (4:34)

You know, we talked to a number of businesses for this story and what we heard is yes, realistically, if the cost of health coverage is going up, a lot, and they feel like they can't really pass all of that on to their workers, this can put a lid on, say, salary increases for workers because that money is really having to go over to pay for the health benefits.