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

Summary

WSJ What’s News – PM Edition

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

Date: October 22, 2025
Host: Alex Osola, The Wall Street Journal

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Overview

This episode examines the sharp rise in health insurance costs for employers and employees in the U.S. for 2025, exploring the drivers behind increased premiums, how companies and workers are impacted, and the broader implications for the labor market. The episode also touches on notable global headlines, including Amazon’s warehouse automation, U.S. and Israel’s Gaza strategy, and timely business news.

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Key Discussion Points & Insights

1. The Soaring Cost of Health Insurance

(Segment Begins ~00:18)

• Premium Spike: The average employer-sponsored family health plan now costs nearly $27,000 a year, marking the third consecutive year of steep increases. Costs rose 6% in 2025, following 7% increases in both previous years.
• Employer & Worker Strain: Employers still cover most of the premiums, but rising costs are squeezing their budgets and limiting their ability to raise wages.
• Quote:
  • Alex Osola: “A family health plan now costs almost $27,000. That's tough on employers providing health benefits and on their workers, too.” (00:18)

Drivers Behind Rising Costs

Discussion with WSJ health insurance reporter Ana Wieldy Matthews
(Main segment 02:59–04:54)

• Increased Medical Spending:
  • Higher prevalence of costly health conditions (e.g., cancer) among working-age adults.
  • Hospitals increasing prices to cover their own rising costs.
  • Expensive new medical therapies, especially widely used weight-loss drugs (GLP-1 class, e.g., Wegovy).
  • Quote:
    • Ana Wieldy Matthews: “Insurers and employers... are seeing rising numbers of working-age people having conditions like cancer. That can really drive the need for a lot of care.” (03:03)
    • “New and emerging therapies... a big item in that category is the GLP-1 drugs, the weight loss drugs such as Wegovy, that can also be costly.” (03:30)

Impact on Employees

• Premiums & Out-of-Pocket Costs:
  • Most of the premium is still paid by the employer.
  • Employees' contributions grow along with the total cost, even if their share stays constant.
  • Out-of-pocket costs—deductibles, copays—are also rising.
  • Quote:
    • Ana Wieldy Matthews: “...the employee sees a growing bite out of their paycheck for that premium... employers do pass on costs to employees through out-of-pocket charges. So that's stuff like deductibles, like your copays.” (03:47)

Impact on Wage Growth & Business Decisions

• Salary Increases Stifled:
  • Businesses interviewed indicated rising health coverage costs limit their ability to offer substantial pay raises.
  • The need to allocate more budget to health benefits “puts a lid” on worker salary growth.
  • Quote:
    • Ana Wieldy Matthews: “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.” (04:34)

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2. Amazon’s Warehouse Automation Push

(Segment Begins 00:37 – 02:59)

• New Technologies Introduced:
  • Bluejay robotic arm for sorting packages—able to recognize and handle hundreds of millions of objects.
  • AI agent for managing human labor—optimizes workflow and worker movement.
  • Augmented reality glasses for delivery drivers—assist with package identification and navigation.
  • Quote:
    • Ty Brady (Amazon Robotics): “Hundreds of millions of different objects that Bluejay 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.” (01:24)
• Implications:
  • Goal is to boost efficiency and safety, offloading mundane tasks to machines.
  • Amazon estimates robots assist with 75% of deliveries already.
  • Billions in potential annual cost savings.

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3. U.S.–Israel Plan to Split Gaza

(Segment Begins 06:44 – 09:24)

• Emerging Plan:
  • Proposal to divide Gaza between an Israeli-controlled reconstruction zone and a Hamas-controlled segment.
  • Reconstruction would only proceed in Israeli-controlled areas until Hamas is disarmed.
  • Jared Kushner is cited as a key advocate, with support from President Trump and VP J.D. Vance.
• Quote:
  • Jared Kushner: “There are considerations... to start the construction as a new Gaza in order to give the Palestinians living in Gaza a place to go, a place to get jobs, a place to live. So that's one of the many things being considered.” (07:14)
• Challenges & Reactions:
  • WSJ Correspondent Dov Lieber says plan is a “Plan B” due to stalemate on disarming Hamas; currently seen as a stopgap.
  • Palestinian fears of permanent partition; Arab states reluctant to contribute troops to any transitional force.
  • “We may have a stalemate between the U.S. side of the mediators and the Arab side of the mediators regarding this plan.” (09:10)

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4. Brief Business & World Headlines

(Selection from 05:02–12:38)

• U.S. to Announce New Russian Sanctions; Pacific anti-drug strike kills 2 (05:02–05:57).
• RNC and DNC Funding Gap: Republicans hold $86M in reserves, Democrats $12M—potential warning sign for DNC (05:57–06:17).
• U.N. Court Orders Israel to Let Humanitarian Aid into Gaza; Israel rejects the non-binding opinion (09:25–09:51).
• Markets: U.S. stock indexes drop slightly due to China trade tensions; Tesla profit solid but down 37%; Netflix and Capital One move on earnings.
• Tech News:
  • Conservative activist Robbie Starbuck sues Google over AI defamation (10:04).
  • Meta cuts 600 jobs in AI division; shifting resources amid the AI arms race (10:51).
  • Tinder to require video face scans in the U.S. to reduce fake accounts and bots (11:40).

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Memorable Quotes & Timestamps

• Alex Osola:
  • "A family health plan now costs almost $27,000. That's tough on employers providing the health benefits and on their workers, too." (00:18)
• Ana Wieldy Matthews:
  • “Insurers and employers... are seeing rising numbers of working-age people having conditions like cancer. That can really drive the need for a lot of care.” (03:03)
  • “Employers do pass on costs to employees through out-of-pocket charges. So that's stuff like deductibles, like your copays...” (03:48)
  • “...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.” (04:34)
• Ty Brady (Amazon Robotics):
  • “Hundreds of millions of different objects that Bluejay 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.” (01:24)
• Jared Kushner:
  • “There are considerations... as long as that could be secured to start the construction as a new Gaza in order to give the Palestinians living in Gaza a place to go, a place to get jobs, a place to live.” (07:14)

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Structure of the Episode

• Opening Briefings: <00:00–00:18>
• Main Insurance Cost Analysis: <00:18–04:54>
• Global and Business Headlines: <05:02–12:38>
• Advertisements & Outro: <06:17–12:44> (skipped in this summary)

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Conclusion

The episode delivers a crisp, data-driven narrative around the accelerating problem of health insurance costs in America, providing clarity on why costs are rising and how employers and workers are absorbing the impact. Other stories underscore how global events and technology advances are converging to reshape workplaces, jobs, and geopolitics, rounding out the day’s big news in typical WSJ fashion.

Transcript

[A]

So your AI agents make your team more productive, right? But if they're not connected to the rest of your business, how productive can they really make your teams? IBM helps smarter businesses get more from their AI agents let's create smarter business IBM.

[B]

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

[C]

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.

[B]

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 Osola for the Wall Street Journal. This is the PM edition of what's News, top headlines and business stories that move the world. 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 Bluejay that sorts packages. Here's the chief technologist at Amazon Robotics, Ty Brady, speaking at the company's event today.

[D]

Hundreds of millions of different objects that Bluejay 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.

[B]

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 U.S. 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. Ana Wieldy Matthews covers health insurance for the Journal and is here now with more. Ana, what's driving up the cost of health insurance?

[C]

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 GLP1 drugs, the weight loss drugs such as WeGovy, that can also be costly.

[B]

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

[C]

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's stuff like deductibles, like your co pays things that you pay when you access care. And that cost has also somewhat been ticking up for employees.

[B]

I'm curious what the broader impact is on businesses. I mean, if they're 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?

[C]

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.

[B]

That was Wall Street Journal reporter Ana Wieldy Matthews. Thank you, Ana.

[C]

Thank you.

[B]

Treasury Secretary Scott Besant said today that the Trump administration is planning substantial new sanctions on Russia and will announce more details either today or tomorrow. And the U.S. said today that it had struck a suspected drug boat on the Pacific side of South America. Defense Secretary Pete Hegseth posted a video of the strike on X. He said it took place yesterday in the eastern Pacific Ocean and killed two people on board. The attack is the eighth reported US Strike on an alleged drug vessel and brings the announced death toll from the campaign to 34. Yesterday's strike was the first in the Pacific. The other seven were in the Caribbean. And the latest money totals from the Republican and Democratic parties show a deep dividend. According to federal filings this week, the Republican national committee had $86 million in cash reserves at the start of October, compared with about $12 million for Democrats. The gap is a warning sign for Democrats, as the party's donors remain skeptical of its direction and whether there's a viable plan to win again. Coming up, what a plan to split Gaza in two means for the peace process. That's after the break.

[E]

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[B]

The US and Israel are considering a plan that would divide Gaza into separate zones, one controlled by Israel and one by Hamas, with reconstruction only taking place on the Israeli side until the militant group can be disarmed and removed from power. White House officials said Jared Kushner is the driving force behind the split reconstruction plan and that he secured support from President Trump and Vice President J.D. vance. Vance and Kushner summarized their thinking in a news conference this week in Israel, where US Officials are trying to maintain the ceasefire. This is Kushner.

[F]

There are considerations being happening now in the area that the IDF controls, as long as that could be secured to start the construction as a new Gaza in order to give the Palestinians living in Gaza a place to go, a place to get jobs, a place to live. So that's one of the many things being considered.

[B]

For more, I'm joined now by WSJ Correspondent Dov Lieberman. Dov, why are the U.S. and Israel suggesting this plan?

[G]

This is a type of Plan B for if Plan A doesn't go right. For Plan A to happen, Hamas will need to disarm, and at this current juncture, it's refusing to do so. They're looking for a way where they can continue to increase pressure on Hamas without breaking the ceasefire.

[B]

We've been talking on the show about how there are unresolved issues in the next phases of the peace plan, including disarming Hamas. Does this plan address that?

[G]

It's a type of stopgap until the plan can be fulfilled. Because right now what we have in Gaza is actually stalemate. Both sides agreed to a hostage release deal and prisoner exchange, and that's what we saw last week. Israel now stationed along a defensive line inside Gaza and Hamas has been conducting a violent crackdown there in recent days. We're told that it's reorganizing its military capabilities. So both sides are preparing for potential another round of fighting or a long grind into the future.

[B]

I'm curious what the reaction has been to this suggested plan from Hamas and from Arab governments.

[G]

I haven't seen a reaction by Hamas, but we know this plan is one that Palestinians have expressed fear about from the beginning of the war. They've expressed this fear about permanent partition of Gaza. And this plan could be the beginning of exactly that full Israeli control and something that looks like the situation in the West Bank. And at the same time, the Arab countries that are involved in this issue, they're supposed to be part of international security force that's meant to replace Hamas and will help stabilize a new Palestinian government. And they're saying they don't want to put boots on the ground in this type of situation. So not only do we have stalemate between Israel and Hamas at the moment, we may have a stalemate between the US Side of the mediators and the Arab side of the mediators regarding this plan.

[B]

That was WSJ reporter Dov Lieber. Thanks, Dov.

[G]

Thanks for having me.

[B]

Separately, the United nations top court ruled today that Israel must allow the United nations aid agency to deliver humanitarian aid in Gaza, labeling Israel as an occupying power. The opinion is non binding. Israel's Foreign Ministry rejected the court's opinion, saying it was an attempt to impose political measures against Israel under the guise of international law. US Stocks traded lower today because of worries about trade tensions between China and the U.S. the three major indexes each fell less than 1%, with the Nasdaq leading the declines. The Dow fell back from yesterday's record close, and Gold continued its retreat from its recent high. Netflix shares fell on yesterday's quarterly results, while Capital One rose after its earnings report. Reporting after the market closed today, Tesla said its profit fell 37% in the third quarter, while its revenue grew 12% after a burst of auto sales. American shoppers bought up electric vehicles before a $7,500 federal tax credit expired last month. Go to WSJ.com for more on Tesla and today's news on technology also includes a WSJ exclusive that conservative activist Robbie Starbuck has filed a defamation lawsuit against Google. The suit alleges that the company's artificial intelligence tools falsely connected Starbuck to sexual assault claims and to a white nationalist and seeks more than $15 million in damages. Starbucks said he became aware of the inaccuracies in 2023 when using Bard, an early Google AI tool. A Google spokesman said that many of the claims related to inaccurate information that Google addressed in 2023 and that inaccurate information was a well known issue for the AI data systems used to create chatbots. This is the second AI related defamation lawsuit Starbuck has filed this year against a large technology company he settled with Meta Platforms this summer. Speaking of Meta, it's cutting about 600 jobs in its AI division. That's according to an internal memo that was viewed by the Wall Street Journal and a person familiar with the matter. The memo said that the job cuts will affect the company's teams focused on AI products, infrastructure and long term research, but won't touch TBD Lab, the new team that houses most of Meta CEO Mark Zuckerberg's multimillion dollar hires. The company has been resetting its AI plans to stay competitive with rivals developing AI technology, and Tinder will soon require all new users in the US to complete a video scan of their face before swiping. The dating app's feature aims to cut down on bots, duplicate accounts and impersonation, and prevent banned users from returning to the platform. Video scanning will roll out across the US in the coming months and globally, where local regulations permit. It's already required for new users in California and in countries including Canada, Australia and India. And that's what's news for this Wednesday afternoon. Today's show is produced by Pierre Biennime and Zoe Kulkin, with supervising producer Tali Arbel. I'm Alex Osola for the Wall Street Journal. We'll be back with a new show tomorrow morning.

[H]

Thanks for listening.

[E]

Foreign.

[I]

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