Individuals with health insurance through the Affordable Care Act (ACA) are about to see significant increases in their monthly premiums. This is primarily due to the expiration of subsidies and insurance companies proposing substantial rate hikes for 2026.
Insurance providers involved with the ACA are planning to raise the average premium by 15% in 2026, marking the most significant rise in the last seven years. This information comes from an analysis by KFF, a health policy research organization, which looked at submissions from over 100 insurers across 19 states and Washington, D.C.
In addition to these premium hikes, the expiration of enhanced subsidies is also a factor. These subsidies had previously helped many afford their ACA health plans by capping costs as a percentage of income.
Typically, by August, a final plan is rolled out outlining the expected monthly payments for enrollees.
The enhanced grants originated from the 2021 American Rescue Plan and broadened eligibility, particularly benefiting middle-class individuals. While the Inflation Reduction Act of 2022 extended these subsidies until 2025, recent domestic policy legislation signed by President Trump did not further extend them. However, subsidies for very low-income individuals, which existed since the ACA’s inception, remain in place. The recent bill also introduced additional complications, including new annual paperwork requirements for ACA participants.
A 2024 analysis suggested that around 4 million individuals could lose their coverage next year if the grants are not renewed, according to the Congressional Budget Bureau, which provides nonpartisan budget and economic information to Congress.
Loss of coverage can also drive up insurance costs. Edwin Park, a research professor at Georgetown’s McCourt School of Public Policy, noted that if fewer insurers participate in the ACA, they face the challenge of spreading costs across a smaller population, leading to even higher premiums.
Further KFF analyses revealed that over 22 million people could experience a sudden spike in premiums starting January 1st.
Park remarked, “This doesn’t mean the ACA is dead, but it feels like a move in that direction.” Chris Meakkins, an analyst at Raymond James, pointed out there’s a slim possibility that Congress might extend the grants for next year, although they’re facing resistance from Trump and other Republicans.
Increased Costs for Individuals
Last year saw record high enrollment in the ACA, with over 24 million individuals registered. The Centers for Medicare and Medicaid Services attributed much of this growth to expanded subsidies, revealing an average monthly premium of $113 compared to $162 in 2020.
KFF’s latest findings indicate that most insurers plan an average premium increase between 10% and 20% for 2026, with some proposing hikes of over 20% in certain quarters.
Larry Levitt, KFF’s executive vice president of health policy, stated during a recent call with reporters that out-of-pocket monthly costs for individuals could rise by more than 75% on average.
For instance, families earning $110,000 annually and enrolled in a typical silver ACA plan might see their monthly costs leap from $779 this year to $1,446 in 2026. Should insurance firms implement that 15% hike, costs could soar to $1,662.
Some individuals may maintain their coverage by either absorbing the higher premiums or opting for pricier plans.
The implications of the recent domestic policy changes could effectively undermine the ACA, diminishing the benefits it offers, according to Levitt.
However, KFF also noted that the potential expiration of subsidies isn’t the sole concern influencing insurers’ premium adjustments. They are also taking into account possible tariffs on certain drugs and medical supplies.
Earlier this month, Trump proposed imposing tariffs of up to 200% on imported prescription drugs.
KFF mentioned that insurance companies are also worried about the rising costs of health services and specific medications, like GLP-1 drugs, which can exceed $1,000 monthly.
In a related note, a group of Democratic lawyers filed a lawsuit this week to block a recent Trump administration rule intended to modify the ACA.
