2026 Health Insurance Premiums Could See Largest Hike In 5 Years: Report

Health insurers are seeking the largest premium increases in over five years for the upcoming Affordable Care Act enrollment period. Rising healthcare costs, including hospitalizations, physician care, and prescription drugs, are a significant factor driving these increases. Enhanced ACA premium tax credits, set to expire at the end of 2025, are expected to further inflate premiums and cause healthier individuals to drop coverage. The expiration of these tax credits could increase out-of-pocket premium payments by an average of over 75 percent. A sicker risk pool resulting from healthier individuals leaving the market is also projected to drive up premiums. Tariffs on drugs, medical equipment, and supplies are contributing to rate increases for some insurers. The Congressional Budget Office projects a significant increase in gross benchmark silver premiums due to the sicker risk pool. Recent budget reconciliation legislation and new Medicaid rules might influence insurers' responses, but the impact is still unclear. The implementation of the Trump administration’s ACA integrity rule does not currently appear to be a major driver of rate changes. Early indications show individual market insurers will increase premiums more than they have since 2018, with a median increase of 15 percent across analyzed markets.