Premium Increases for Texas ACA Plans in 2026
Health insurance providers in Texas have proposed an average premium hike for their Affordable Care Act (ACA) plans for 2026.
Last year, insurance companies raised rates by an average of 3.8%. According to KFF, the upcoming adjustments could represent the largest increase since 2018, a year when premiums spiked by 35% in Texas. That increase occurred during a period of congressional efforts to repeal the ACA and after a significant executive order from then-President Donald Trump that halted subsidies for low-income policyholders. Since then, the average premium in Texas has remained relatively stable, only occasionally increasing by more than 4%.
In 2025, approximately 4 million Texans had insurance coverage through the ACA market. Enrollment has surged threefold since 2020, following an expansion of tax credits aimed at making coverage more affordable for users.
These tax credits have significantly affected healthcare trends in Texas. For instance, annual enrollment jumped from 1.3 million in 2021 to nearly 4 million in 2025. Additionally, the average subsidy for monthly premiums fell from $136 in 2018 to $50 in 2024.
Texans are also enjoying a wider range of plans now. The number of insurers participating in ACA individual markets has grown from eight in 2020 to fifteen today.
This expanded competition means insurers are more focused on pricing. Back in 2018, 98 counties had only one insurance provider, while today, there are 114 counties where residents can select from at least four different insurers—notably, most are located near the Oklahoma border.
Still, the very profits that insurers are savoring may be jeopardized by the impending expiration of end-of-year tax credits, rising medical costs, and increased utilization of health services.
“It’s like a perfect storm,” noted Blake Hutson, vice president of public relations for the Texas Health Planning Association. “We’re increasingly concerned about how these factors will affect Texans who are purchasing coverage on their own.”
The Ripple Effect of Federal Cuts
The premium tax credits enhanced by the Democrats in both the 2021 American Rescue Plan Act and the 2022 Inflation Reduction Act benefit around 83% of Texans on ACA plans. These credits help lower premiums on a sliding scale based on income, directly funding insurers. Currently, premiums are capped at 8.5% of a person’s monthly income, extending eligibility to those earning above 400% of the federal poverty level, including many seniors and small business owners. As income decreases, the size of the tax credits increases. This allows health insurers to charge higher premiums as healthier individuals opt out.
In Texas, 58% of those who rely on ACA plans have a monthly premium below $10.
However, these tax credits are scheduled to expire at the year’s end, particularly affecting those earning over $62,600, who would no longer qualify. Meanwhile, individuals earning under 150% of the federal poverty level will lose benefits as well.
Given the expectation of tax credit expiration, insurers looking to set up fees for 2026 are requesting higher rates. Congress still has the option to extend these credits before they expire at the end of 2025. However, decisions on premium rates usually occur by late summer, ahead of enrollment starting on November 1.
Texans could ultimately face increases exceeding the anticipated average hike of 24%, with predictions suggesting an average annual rise of 115%—or about $456—for those utilizing ACA tax credits.
Insurance broker Michelle McLaren mentioned that the ACA marketplace has remained steady recently, with reasonable yearly premium increases. Nevertheless, filings for 2026 reveal notable changes that may lead to higher uninsured rates and a shrinking ACA market in Texas.
“This will likely impact people in rural areas, those with low incomes, and seniors,” McLaren stated.
Healthcare analysts fear the market may contract significantly after the expiration of subsidies. A similar scenario unfolded in 2016 when the ACA enrollment pool was less healthy than the general public, leading to increased premiums and numerous insurers exiting the market, exacerbating issues for vulnerable populations in rural areas.
This cycle may reoccur if healthier Texans leave the ACA market due to rising premiums.
Currently, the average premium for Texans covered by ACA plans stands at $57 post-credits, while the benchmark second-lowest silver plan costs approximately $489 monthly in Texas.
Federal regulations require insurers to allocate at least 80% of the premiums collected towards healthcare costs and quality improvements for individual plans. If they fall short, they must issue rebates to subscribers. The Texas Department of Insurance will review submitted filings to ensure compliance.
Expected Impact on Various Plans
Blue Cross Blue Shield (BCBS), Texas’ largest insurer and the only provider available across all 254 counties, has proposed an average rate hike of 39% for individual plans. They indicated that the price increase could range from 9% to 65% for around 1.1 million Texans enrolled in BCBS ACA plans.
The specific rate increase will depend on the selected plan and region, regardless of the insurer.
BCBS attributed rising health service and prescription drug costs as key reasons for their premium hike. Initially aiming for a 21% increase, they revised that request upward. This causes considerable concern among policyholders about maintaining their coverage.
“Given BCBS’s dominant role in the state, this situation is quite challenging,” McLaren mentioned. “Their increase could affect many.”
Last year, BCBS raised its rates by an average of 6.6%, with some individuals experiencing reductions. They had initially aimed to stabilize premiums in 2024.
United Healthcare, covering over 580,000 Texans via ACA, is asking for a 23% increase in its rates for 2026.
UHC highlighted that the expiration of enhanced tax credits was a primary factor for this increase, citing other reasons like higher provider reimbursement rates, increased medical visits, and the use of newer, more expensive technologies.
Previously, their rate rise in 2025 was 8.9%.
Younger and healthier Texans may seek alternative coverage options if the tax credits are discontinued. UHC has explicitly forecasted compensation losses tied to tax credit expiration. If premiums become unaffordable, many individuals might drop their coverage, which could worsen risk pooling and lead to further premium increases.
Other large insurers in the state are also requesting significant rate hikes. Celtic Insurance Company has proposed a 41% average increase for its coverage, affecting over 487,000 Texans. Similarly, Superior HealthPlan, which offers coverage to 475,000 Texans through ACA plans, is requesting a 36% average increase, driven by similar concerns over risk pool morbidity following tax credit expiration.
Premium increases have varied across regions, with a notable average hike of 37% in Houston compared to 30% in Austin.
McLaren underscored that beyond the tax credit expiration, other factors significantly impact rising healthcare costs and subsequently, premiums.
“Duties on medical supplies can also drive up costs, especially since many are imported,” she noted. “Uncertainty tends to increase premiums, too.”
