As the calendar inches toward the end of 2025, Americans are bracing themselves for a new wave of health insurance sticker shock. In North Carolina, the alarm bells are ringing especially loudly. Governor Josh Stein has issued a passionate plea to Congress, warning that if the Affordable Care Act’s enhanced premium tax credits aren’t renewed by year’s end, hundreds of thousands of his constituents could be left scrambling for affordable coverage. But it’s not just North Carolina that’s feeling the heat—across the country, both families and businesses are staring down the sharpest rise in health insurance costs in over a decade and a half.
“We have a responsibility to stay laser-focused on lowering costs for families, including health care costs,” Stein declared, as reported by the Governor’s Office. His message was clear: the expiration of these vital tax credits could upend the lives of “157,000 North Carolinians” who risk losing their insurance, while an additional “888,000” could see their premiums double. The urgency is palpable, with the Governor’s Office emphasizing that nearly 80% of enrollees nationally—folks who’ve been able to snag plans for $10 or less per month thanks to these credits—could soon be facing a financial cliff if Congress doesn’t act by September 30.
The North Carolina Department of Insurance isn’t mincing words either. They project that letting the credits lapse “will make it more difficult for people to afford their premiums,” with rural residents, young people, and those with lower incomes bearing the brunt. Some counties—Dare, Hyde, Brunswick, Pamlico, and Transylvania—are staring down the barrel of annual premium hikes topping $1,000. It’s a scenario that could ripple far beyond individual pocketbooks, potentially destabilizing the state’s entire insurance market.
The backdrop for this looming crisis is a U.S. healthcare system that’s already under strain. North Carolina’s health infrastructure has felt the squeeze from “drastic federal cuts to Medicaid,” as the Governor’s Office points out. The loss of enhanced tax credits would only compound those pressures, threatening to drive insurers out of the individual market and make affordable insurance a distant dream for many.
But the Tar Heel State is hardly alone in this predicament. Nationwide, businesses are girding themselves for what looks to be the steepest increase in employee health-insurance costs in more than 15 years. According to Aon, employer coverage is projected to surge by about 9.5% in 2026, a figure echoed by a separate WTW survey that pegs the jump at 9.2%. For the roughly 154 million Americans who get their health insurance through their employer, this means one thing: higher paycheck deductions are coming, with many likely to see their co-pays and out-of-pocket costs climb as well.
“It’s almost a perfect storm that’s hitting employers right now,” Larry Levitt, executive vice president for health policy at KFF, told NPR. “The price of health care is going up faster than it has in a long time.” He added, “And typically when an employer is getting a big increase from an insurer, the employer is turning around and trying to pass on some or all of that to its workers.”
The numbers are eye-popping. Mercer, a benefits consultancy, surveyed over 1,700 organizations and found that employers are set to pay almost 9% more per employee next year for the same level of health coverage—the biggest leap in 15 years. And 59% of those employers plan to offset those costs by shifting more of the burden onto employees through “cost-cutting changes” like higher deductibles, copays, or other out-of-pocket expenses. As Beth Umland, Mercer’s director of health and benefits research, put it, “I think just something had to give.”
So what’s fueling this relentless upward march in health care costs? It’s a tangled web of factors. Insurers point to rising expenses for hospital care, a greater use of medical services, and a surge in costly drugs—especially new GLP-1 weight-loss and diabetes treatments, as well as advanced cancer therapies. After years of pandemic-era disruptions, more people are finally seeking the care they put off, which is good news for public health but tough on wallets. And, as Sunit Patel, Mercer’s chief actuary for health and benefits in the U.S., observed, the loss of competition caused by mergers and consolidations among hospitals, insurers, and pharmacy benefit managers has allowed the remaining players to hike prices with little pushback. “What’s missing in health care is: It’s not a traditional free market. You don’t have those competitive forces,” Patel told NPR.
For many workers, the pain is both obvious and hidden. The average U.S. employer spent over $19,000 per employee for family coverage in 2024, with employees themselves ponying up about $6,000. The total average family premium—$25,572—has ballooned by 52% over the past decade, according to KFF. And while some employers have tried to shield workers from the full brunt of these hikes to keep talent during a tight labor market, that buffer is eroding fast. Umland explained that health care benefits are considered part of total compensation, meaning that as health costs rise, there’s less room for salary increases. “In general for workers, it’s kind of take it or leave it,” Levitt noted. “And they really don’t have much of a choice but to take it.”
On the business side, the situation is no less fraught. The sharp increase in employer health costs is forcing companies to make tough decisions. Some are trimming benefits, others are raising employee contributions, and a few are exploring alternative insurance models. But with the cost drivers showing no sign of abating—especially as innovative but expensive pharmaceuticals hit the market and hospital prices continue their upward spiral—there’s little optimism that relief is on the horizon.
Meanwhile, some bright spots flicker on the horizon. In a bid to address supply chain issues, Walmart, McKesson, and USAntibiotics have struck a deal to ramp up production of amoxicillin, a widely used antibiotic. USAntibiotics claims it will now be able to meet 100% of national demand, with Walmart pharmacies stocking the made-in-America supply. While this won’t solve the broader affordability crisis, it’s a reminder that targeted interventions can make a difference—at least for certain essential medications.
Back in North Carolina, the stakes remain sky-high. Governor Stein’s warning is not just about numbers on a spreadsheet—it’s about the real-world impact on families, communities, and the state’s already stretched health system. If Congress doesn’t act soon to extend the ACA’s premium tax credits, the fallout could be swift and severe, not just for North Carolina but for millions of Americans nationwide. As policymakers in Washington weigh their next moves, the message from the ground is unmistakable: when it comes to health care, the cost of inaction is simply too high.
