Upcoming Changes to Affordable Care Act Coverage
In the next three months, the 204 Million Affordable Care Act (ACA) health insurance exchange will face notifications regarding significant new costs for renewing coverage. This situation stems directly from policies enacted by the Trump administration and Republican lawmakers, and, well, that’s just the reality of it.
There’s a particular bill—often referred to as the OBBBA—that will transition many into Medicaid; this also impacts Medicare if Congress doesn’t act. Without an adjustment to the ACA tax credits for exchange participants, an estimated 15 million Americans might find themselves without health insurance. Those who do choose to remain insured will often be individuals with greater health needs, which can lead to a scenario where insurance companies have to pay out more claims.
As rising costs loom for insurance customers and with billions at stake, the need for increased premium rates is creating a kind of spiral. It forces those who stay insured to reconsider their budgets or prioritize other essential expenses.
“I think many Congress members might not be fully aware of the rapid increase in health insurance premiums,” commented Larry Levitt, KFF’s vice president of health policy. “When they do take note, it probably makes them a bit uneasy as they think about facing voters, especially Republicans.”
In a spring and summer analysis by insurance companies on premiums proposed for 2026, the increase observed represents the largest jump since 2018. Over a quarter of insurers are asking for hikes exceeding 20%, with the median increase estimated at about 15%—double what it was a year prior, and notably higher than the rise in overall healthcare costs.
This analysis was conducted by the Peterson-KFF Health System Tracker. Any proposals need state insurance regulators’ approval. Registrants will get informed about the changes between late October and early November, likely experiencing a considerable sticker shock.
The anticipated increases are mainly tied to the potential loss of strengthened ACA tax credits, making it feel like more than just a standard premium rise for many enrollees. “Out-of-pocket premiums could rise significantly,” Levitt mentioned. These enhanced tax credits were initial measures from the US Rescue Plan four years ago, extended by the Inflation Reduction Act, which helped keep insurance affordable for a majority of people.
If the tax credits vanish in December, 2026 premiums could revert to earlier, more burdensome levels, affecting families above 400% of the federal poverty line who wouldn’t qualify for tax credits anymore. “It’s a dual hit for those households,” Levitt explained.
Interestingly, ACA exchange participation is expected to climb, with the most pronounced effects likely hitting states that didn’t expand Medicaid.
There are minor contributors increasing health insurance costs too, like tariff changes impacting the prices of medical devices and medications. A lot of the proposed hikes were submitted shortly before the OBBBA legislation was signed, which also caused temporary disruptions in the healthcare system. And the new “Market Integrity” rules established recently could mean insurers didn’t factor in these elements while setting rates for 2026, indicating potential for even bigger increases down the line.
Even prior to the OBBBA, insurers indicated the necessity for year-round rate hikes. This hasn’t deterred them from successful financial maneuvers, such as delivering dividends and stock buybacks to shareholders. Aetna, for instance, plans to exit the ACA exchange next year entirely.
There are other strategies insurers could utilize besides raising premiums, such as denying costly treatments or medications. Claims denial rates have shot up significantly over the past decade.
Whether this major cost burden will push Republicans towards expanding ACA subsidies in 2026 remains uncertain. It might be a straightforward solution to alleviate a considerable financial strain that millions will soon face.
Polling data reveals a bleak outcome for Republicans if premium tax credits disappear—there’s broad bipartisan support for them. In competitive districts, Democratic backing could significantly increase if the tax credit lapses. Yet, Jason Smith, the chairman of the House Ways and Means Committee, recently mentioned that an extension could become problematic for some members.
A potential healthcare package by the year-end could address issues concerning pharmacy benefits managers, while Democrats would likely advocate for a tax credit extension as part of any collaboration.
“Republicans might not enjoy supporting Obamacare,” Levitt pointed out, “but the alternative is a stark reality for over 20 million individuals.”
