Individuals acquiring health insurance through the Affordable Care Act (ACA) may face significant increases in premiums next year.
Based on preliminary filings from KFF released last Friday, insurance companies are anticipating an average premium rise of around 15% in 2026. This marks the largest hike seen since 2018. The analysis draws from submissions by over 100 insurers across 19 states as well as Washington, DC.
The trend of rising premiums has been apparent in recent years. For instance, KFF reported a median proposed increase of 7% for the 2025 planning year.
Most insurers under the ACA are expecting premium hikes in the range of 10-20% for 2026. However, over 25% of them are projecting increases exceeding 20%, according to KFF.
Interestingly, no insurers have proposed reducing rates for 2026. Yet, there have been instances in previous years where certain insurers lowered their premiums.
Insurers attribute the need for higher premiums to escalating medical costs, which include expenses related to hospital stays, physician visits, and prescription medications.
Moreover, a portion of the increase aligns with measures taken by the Trump administration and Republican lawmakers. KFF noted that many insurers reference the potential for enhanced premium tax credits as a factor contributing to the rise.
These tax credits, introduced during the COVID-19 pandemic, are set to expire at the end of the year, with little indication that there is Republican support for addressing the matter.
KFF projects that, should Congress remain inactive, premium costs for enrollees receiving subsidies could surge by more than 75% starting January 2026.
Moreover, companies indicated they might hike premiums by an additional 4% if the enhanced tax credits are kept in place.
This year, over 24 million Americans have signed up for the insurance market, with about 90% (over 22 million) benefiting from increased subsidies. The Congressional Budget Office (CBO) estimates that 4.2 million individuals may lose their insurance by 2034 if the grants are not extended.
Data from federal sources show that the average monthly premium stood at $113 last year due to subsidies, compared to $162 in 2020.
When premiums rise, healthier individuals often exit the market first. This trend leads to a scenario where insurance companies are left to manage costs among a smaller pool of people who tend to have higher medical needs, resulting in increased premiums.
