Family health premiums outran American wages by nearly 3 to 1 in 25 years — and study blames soaring hospital prices

Americans with job-based coverage have watched their family plans get more expensive year after year, outstripping raises, groceries, and rent.

The usual suspects get the blame on open-enrollment forms: insurers, drug makers, bloated paperwork.

An economic study out of Rice University published December 2025 points somewhere else entirely, and the math behind it is harder to argue with than any yearly rate letter.

Between 1999 and 2024, total employer-sponsored family premiums rose 342% while workers’ earnings grew just 119% and general inflation ran at 64%, according to the analysis by Salpy Kanimian and Vivian Ho published in JAMA Network Open. Worker contributions toward family coverage climbed 308% over the same stretch.

The paper traces the gap mainly to hospital prices. Hospital services reached an index value of 193 by 2024, the steepest climb among the medical categories the authors tracked, even though per capita admissions, outside of outpatient visits, declined.

Mergers, not medicine, driving the jump

Kanimian pointed to the consolidation wave sweeping the sector. “Health system consolidation fueled by mergers and acquisitions of hospitals is driving the rapid escalation in hospital prices,” she said in a statement released by Rice University.

The structural picture matches. Independent hospitals fell from 90% of the market in 1970 to 32% in 2019, and roughly 90% of US hospital markets are now classified as “highly concentrated”, according to a January 2026 Bipartisan Policy Center brief. Hospital-to-hospital mergers in those concentrated markets can raise prices anywhere from 6% to 65%, the brief notes, citing a 2025 Department of Health and Human Services evidence synthesis.

Who sits in the boardroom

The pressure to maximize revenue is built in at the top. At the country’s 15 top-ranked hospitals, 44% of board members came from the financial sector and only 14.6% were health professionals, according to a 2023 study in the Journal of General Internal Medicine by Suhas Gondi and colleagues. The authors wrote that the composition “may reinforce voiced concerns about the salience of financial success as a dominant priority for major hospitals.”

What this year’s plans look like

The pressure has not let up. In 2026, workers paid an average of $7,471 toward family coverage, up 9% in a single year, according to KFF’s 2026 Employer Health Benefits Survey released in October. Total family premiums reached $28,303.

Mercer, surveying more than 1,700 US employers, projected a 6.5% jump in total health-benefit costs per employee for 2026, and reported ahead of the 2026 plan year that 59% of employers planned cost-cutting changes such as higher deductibles or cost sharing to offset the hit.

Policy proposals aimed at the consolidation problem include stricter antitrust review of hospital mergers, Medicare site-neutral payment rules that end higher pay for the same service when it is billed by a hospital outpatient department, and stronger health care price and billing transparency rules, the Bipartisan Policy Center brief notes.

This article is made and published by Jens Asbjørn Bogen, who may have used AI in the preparation