Health insurance costs to spike again: What to expect in 2026.
Consumers who buy health insurance through the Affordable Care Act marketplace will likely face double-digit rate hikes next year.
Insurers plan a median premium increase of 15% for 2026 plans, which would be the largest ACA insurance price hike since 2018, according to a Peterson-KFF Health System Tracker analysis published on July 18.
And many working-age consumers who get their health insurance through the workplace won't be spared, either. Benefits consultant Mercer said more than half of big employers expect to shift a larger share of insurance costs to employees and their families next year by raising deductibles, copays, or out-of-pocket requirements.
KFF said the ACA insurers cited factors such as medical cost inflation, the expiration of tax credits instituted during former President Joe Biden's administration that made plans cheaper, and tariffs on prescription drugs and medical device imports.
Still unknown is how President Donald Trump's and Congressional Republicans' tax cut and spending law might impact next year's ACA health insurance rates, experts said.
Trump's tax cut law has "created a lot of uncertainty," said Matt McGough, a policy analyst for KFF's program on the ACA. "Insurers weren't sure how to handle it."
Millions of nondisabled adults are projected to lose Medicaid coverage due to the law's work-or-volunteer requirement, but the law also will impact some who buy ACA plans.
Trump's law and a federal rule will end a special sign-up period for people who earned less than 150% of the federal poverty level − a group that had significant enrollment gains in recent years. The enrollment perk allowed low-income Americans to sign up for coverage year-round, making it easier for families to sign up, McGough said.
The law also ends automatic ACA enrollment renewals for consumers, who will be required to update their income and other information annually.
Trump administration officials have said the Biden administration's enrollment policies for Medicaid and the Affordable Care Act allowed fraud and abuse.
In a July 17 news release, the Centers for Medicare & Medicaid Services said it discovered 2.8 million Americans were potentially enrolled in Medicaid or Children's Health Insurance Program plans in multiple states, or they were simultaneously enrolled in Medicaid/CHIP plans and subsidized ACA plans. The agency said it initiated steps to ensure people weren't simultaneously enrolled in multiple, taxpayer-subsidized insurance plans.
In a statement, Health and Human Services Secretary Robert F. Kennedy Jr. said the Trump administration "will no longer tolerate waste, fraud, and abuse at the expense of our most vulnerable citizens."
Higher health costs, end of COVID-era tax credits
Higher health care spending is the top factor driving health insurance premiums higher ‒ accounting for roughly half of the expected insurance price hikes, McGough said.
Another significant factor is that Biden's COVID-19 pandemic-era tax credits, which made ACA plans cheaper for consumers and drove record-high enrollment, will expire at the end of the year. The nonpartisan Congressional Budget Office estimated that about 5 million could lose health insurance after the tax credits expire.
KFF said the expiring tax credits will increase ACA consumers' out-of-pocket premium payments by more than 75% on average. Healthier enrollees will likely choose to drop their coverage, leaving insurance plans with groups of sicker patients who require more health care, McGough said.
KFF's review of 105 ACA insurers in 19 states and Washington, D.C., found most are seeking rate hikes of 10% to 20% for coverage next year. Another 28 insurers will seek rate hikes of 28% or more.
State and federal insurance regulators must sign off on proposed rate hikes before they are finalized this fall.
Most working-age Americans get health insurance through their own or a spouse's employer. These large employers will be more willing to pass along a larger share of health insurance costs to workers and their families next year, a July 16 report from benefits consultant Mercer found.
Mercer said 51% of large employers say they are likely or very likely to shift costs to workers through higher deductibles or out-of-pocket maximums. A year ago, 45% of employers were willing to make their workers absorb a higher share of the health bill.
Employers' health benefits costs are expected to rise 6% in 2025 and could rise even faster in 2026. To curb those cost increases, employers are adjusting insurance plan options for workers and their families, said Beth Umland, Mercer’s director of research for health and benefits.
Earlier this decade, employers were reluctant to shift significant health costs to workers due to the tight labor market. But with health costs rising faster than inflation, more companies are willing to do so, Umland said.
Companies are also increasingly offering plans that encourage workers to get care from narrower networks of doctors and hospitals who have negotiated discounts with the insurance plan, Umland said.