They Hated Health Insurance. So They Started Paying For Each Other’s Care.

They Hated Health Insurance. So They Started Paying For Each Other’s Care.

Health insurance costs in the United States have seen notable changes in 2025, influenced by various factors such as policy adjustments, economic conditions, and healthcare market dynamics. This article provides a comprehensive overview of these costs, examining average premiums, contributing factors, regional variations, and projections for the future.

Average Health Insurance Premiums in 2025

In 2025, the average monthly premium for an individual purchasing a Silver plan through the Affordable Care Act (ACA) marketplace is approximately $621, amounting to $7,452 annually.

This represents a 7% increase from the previous year, continuing a trend of rising healthcare costs. Similarly, MoneyGeek reports an average monthly premium of $539 for a 40-year-old individual with a Silver plan, totaling $6,468 annually.

These variations underscore the influence of factors such as age, location, and specific plan details on premium rates.

Factors Influencing Premium Increases

Several elements have contributed to the escalation of health insurance premiums in 2025:

1. Medical Cost Trends: PwC's Health Research Institute projects an 8% year-on-year medical cost trend for the group market and 7.5% for the individual market. This surge is driven by inflationary pressures, increased prescription drug spending, and higher utilization of behavioral health services.

2. Market Concentration: The consolidation of insurance providers has led to reduced competition in certain regions, potentially resulting in higher premiums. The Government Accountability Office notes that as markets become more concentrated, costs for insurance are likely to rise.

3. Expiration of Federal Subsidies: Enhanced federal subsidies introduced during the COVID-19 pandemic are set to expire at the end of 2025. This potential expiration could lead to significant premium increases for many enrollees if Congress does not act to extend these subsidies.

Regional Variations in Premiums

Health insurance premiums vary significantly across states due to factors such as local regulations, healthcare costs, and market competition. For instance, Vermont, Alaska, and North Dakota have experienced some of the highest premium increases in 2025. Vermont's lowest-cost Silver plan premium rose from $948 to $1,275, making it the highest in the nation. Conversely, New Hampshire maintains much lower premiums.

Impact of Employer-Sponsored Insurance

Employers are also facing rising health insurance costs. U.S. employers anticipate a 5.8% increase in health insurance expenses for 2025, marking the third consecutive year of over 5% increases. This trend is attributed to higher medical service costs, increased service utilization, and expenditures on expensive prescription drugs.

Despite these increases, employee contributions are expected to remain steady at approximately 21% of total plan costs.

Future Outlook and Considerations

Looking ahead, several factors could influence health insurance costs:

• Legislative Actions: The potential extension or expiration of federal subsidies will significantly impact premium affordability. Policymakers' decisions in this area are crucial.

• Healthcare Innovations: Advances in medical technology and pharmaceuticals may lead to higher costs but could also improve outcomes and efficiency.

• Economic Conditions: General economic trends, including inflation and employment rates, will continue to affect both insurers' pricing strategies and consumers' ability to afford coverage.

Conclusion

In 2025, health insurance costs in the U.S. have risen due to a combination of medical cost trends, market dynamics, and policy changes. Understanding these factors is essential for consumers navigating their healthcare options. Staying informed about potential legislative developments and exploring different coverage options can help individuals and employers manage these rising costs effectively.

Perlman, a 61-year-old tech CEO from Austin, Texas, is a member of CrowdHealth, a health care startup that seeks to replace health insurance with a crowd-funding model that the company says lowers costs and diverts money from insurance conglomerates to real people. Perlman likes the company because he says it sidesteps insurers’ incentive to deny claims and seek profit, while erasing patients’ ignorance about what health care actually costs.

“You have a feeling you’re part of a community and you’re looking out for them,” says Perlman. “It feels like the money I am paying is helping other people.”

CrowdHealth, which was founded in 2021, offers a new take on an old idea. For decades, religious health-sharing ministries with names like Medi-Share and Samaritan Ministries have asked communities to pitch in for the medical bills of strangers. CrowdHealth has no spiritual affiliation; it’s a peer-to-peer financial-technology company that allows its roughly 10,000 paying members to make payments toward fellow members’ medical expenses. 

To join, members pay an administrative fee of about $55 a month. Each month, they get a message from CrowdHealth informing them that another member needs financial assistance for a specific medical issue. Members can agree to pay their share of the bill, which doesn’t exceed $140 per month for a single person under 55, or $420 for a family of four. Or they can decline—at the cost of eroding their rating on CrowdHealth’s site, making it less likely that fellow members will contribute to their own needs.

When a member has a health care expense, they’re instructed to pay in cash, or tell a hospital that they are a self-pay customer, save the receipts, and submit them to CrowdHealth for compensation. (CrowdHealth sometimes negotiates the price of planned labs or procedures ahead of time.) The company says it covers 99.8% of claims, though it does not specify what exactly is counted in that statistic.

What draws people to CrowdHealth is deep discontent with the U.S. health insurance system. The share of Americans who said that the quality of health care in the U.S. is excellent or good—44%—is the lowest since at least 2001, according to a December Gallup poll. Even many of those with good insurance coverage are frustrated at the system’s perverse incentives, byzantine regulations, and opaque processes. It’s this frustration, in part, that led to a groundswell of public support who was charged with first-degree murder in December for allegedly gunning down UnitedHealthcare CEO Brian Thompson in Manhattan. 

For better or worse, CrowdHealth is not health insurance, and there are caveats to the coverage it will provide. CrowdHealth won’t pay for procedures related to preexisting conditions, including pregnancy, until you have been a member for nine months. They won’t accept smokers, heavier individuals, or anyone age 65 and over. It doesn’t cover long-term prescription or fertility treatment. And the company expects members to spend time on the phone with medical providers negotiating a cash price, as well as sometimes putting money up front to pay the bill before waiting for reimbursement. There is no guarantee that CrowdHealth will pay for your medical procedures.

Still, for some people, the idea of healthcare sharing is more appealing than dealing with insurance companies. “What resonates with people is that they’re just tired of health insurance. They’re tired of these bills and these claims getting denied,” says Andy Schoonover, the CEO and founder of CrowdHealth.

Schoonover says his own frustrations with health insurance motivated him to create CrowdHealth. After he sold a company and lost his employer-sponsored health insurance, he went on the health care marketplace and purchased insurance for himself, his wife, and two children, paying about $1,200 per month.

Like many Americans, Schoonover had a plan through the Affordable Care Act, which dramatically expanded access to health care in America. However, many consumers have reported problems getting claims approved through these plans. Nationwide, about 20% of claims through healthcare.gov insurers were denied in 2023

Schoonover says that his insurer refused to pay $8,000 for ear tubes to treat his one-year-old’s recurring ear infections—a treatment doctors said was medically necessary, but the insurer said was not. So Schoonover started thinking about alternatives.

“I said to them, ‘Look, if you’re not willing to pay my bills, I won’t pay your bill,’” he recalls. He dropped his insurance, started to pay cash for procedures, and began looking at better ways to cover health care bills without insurance.

Schoonover says he was surprised how much money he could save by offering to pay cash rather than offering up his insurance card since he spared doctor’s offices administrative costs. But that still left the question of how to cover the crushing fees of a major health problem like cancer. That’s where the idea of CrowdHealth came in.

“My next thought was, ‘If I could get a group of people willing to go the same route as me, then there could be others out there to help me in the case of a large medical event,” he says.