Running a business in Washington is getting harder due to rising health care costs, a challenging regulatory and tax environment, and trade uncertainty.
Surveys from the Association of Washington Business in 2024 and 2025 reveal that nearly half of employers rank health care affordability as a top concern on par with inflation and taxes.
Nearly 4 million Washingtonians, or 52% of the state’s population, are covered by employer-provided health insurance. Recent national surveys by the U.S. Chamber of Commerce show that 89% of Americans prefer to get their coverage through their employer.
But rising health care costs are straining budgets across industries, forcing employers to make tough trade-offs between investing in compensation, innovation, and growth. As health benefits become one of the largest expenses on the balance sheet, they increasingly limit a company’s ability to remain competitive and expand.
At the same time, Washington passed $9.4 billion in new and higher taxes, the largest tax increase in state history.
Through the expansion of sales tax and business and occupation taxes, local businesses of all types will be impacted. AWB members report significant concerns: a tree service company will face an $80,000 annual increase; an engineering firm projects between $300,000 to $400,000 in additional taxes.
And even a not-for-profit health plan like Premera expects to add several million more dollars to the roughly $75 million we already pay annually in state taxes, fees and assessments. These costs will further drive up prices on everything, including health care.
Unfortunately, the challenges don’t end there.
Medicaid and Medicare are used by 40% of Washingtonians. State and federal reimbursements — already low — will soon shrink further, but the cost of care won’t. Who is left to close the gap? Employers and families who get charged more, on top of last year’s double-digit hikes.
The gap will widen even further if enhanced tax credits associated with the Affordable Care Act go away. The Washington Health Benefit Exchange estimates that 80,000 people in Washington could lose coverage if the credits expire.
Employers are not powerless. In fact, they have more influence than they often realize.
The AWB survey makes clear that while taxes, regulation, and health care are top-of-mind, businesses are already taking steps to address these challenges. Many are working through organizations such as the Association of Washington Business, the Washington Roundtable, and local chambers to support more balanced tax and regulatory policies that promote predictability and competitiveness while sustaining essential services.
There is a growing emphasis on health care affordability, with businesses exploring ways to stabilize costs for both employers and consumers. This includes efforts to minimize the factors driving price increases while maintaining access to high-quality care.
Employers are also helping their teams make informed health care decisions, encouraging preventive care, and integrating benefits to improve coordination.
Strengthening connections to primary care is another area of focus, as ongoing relationships with providers have been shown to improve health outcomes and reduce costs. A 2022 study by the National Institutes of Health found that each in-person primary care visit is associated with $721 in annual savings, with even greater savings for high-risk patients.
Finally, businesses are increasingly sharing their experiences with policymakers, offering insights into how rising costs affect their ability to invest, grow, and support their workforce.
Washington’s strength has always come from its ability to adapt and innovate. By tackling health care affordability and building a fair tax and regulatory system, we can position our state to remain a place where businesses thrive, and communities prosper.
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Washington State Standard is part of States Newsroom, the nation’s largest state-focused nonprofit news organization.
