Why health insurance is getting more expensive
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There's a good chance your health insurance premiums are going up next year, regardless of where you get coverage.
Why it matters: The spike in what millions of Affordable Care Act plan enrollees pay will be acute, but workplace insurance is getting more expensive, too — and all at a time when affordability is prominently on Americans' minds.
ACA premiums have dominated the political discourse in Congress for weeks, but there's no real sign that any relief is coming from Washington.
- Even extending the Biden-era enhanced ACA subsidies — which most Republicans don't want to do — would do nothing to address what's driving the surging cost of care or employer insurance affordability issues.
- And all signs point to Democrats hammering Republicans for high costs in all forms of health insurance leading up to next year's midterm elections.
The big picture: Health insurance gets more expensive almost every year, keeping up with increases in the costs of procedures, tests, drugs and more. But some years see bigger jumps than others, and 2026 is looking like one of those years.
- That means tough choices for families, employers and workers all faced with shouldering higher premiums or out-of-pocket spending. Some will conclude it's prohibitively expensive and go uninsured.
- Another thing that's different about this year is that the white-hot political rancor around ACA premiums is putting health insurance back centerstage politically.
By the numbers: ACA insurers themselves are raising premiums by an estimated 26%, in part due to rising hospital costs, higher demand for pricey GLP-1 drugs like Ozempic, and the threat of tariffs.
- But add in the loss of federal subsidies, and the increase is 114% — or more than double what they currently pay, according to KFF. 22 million out of 24 million marketplace enrollees now receive subsidies.
- Premiums in the small group employer market will go up by a median of 11%, also per KFF, due to some of the same reasons insurers cite in ACA markets.
For employer health insurance, there's no comprehensive data yet for 2026, but estimates from earlier this year put the increases in the high single digits.
- For example, according to Mercer, health benefit costs are expected to increase 6.5% per employee in 2026, and many employers are planning to limit premium increases by raising out-of-pocket costs for employees.
- One factor driving these increases is advances in medicines, like new cancer treatments, that are more expensive, according to Mercer.
- But people are also using health care more, per Mercer. That's possibly because they missed or delayed care during the pandemic — but also because the use of AI in doctors' offices gives them more capacity and allows them to work faster.
Between the lines: Just this month, Gallup polling found that approval of the ACA has hit an all-time high of 57%, including more than 6 in 10 independents but only 15% of Republicans.
- Another recent Gallup poll found that 29% of Americans say that cost is the "most urgent health problem" facing the country, up from 23% a year ago.
The bottom line: Get ready to hear a lot more about health care costs over the next year — while potentially also experiencing your own premium increase.
