Why Health Insurance Costs Are Increasing in 2026 and What Consumers Can Do

Updated 2026

ACA Marketplace premiums increased sharply in 2026, while employer-sponsored and small-group coverage also faced significant cost pressure. The reasons are not identical across markets. For Marketplace consumers, the expiration of enhanced premium tax credits changed what many people paid out of pocket. At the same time, underlying medical costs, prescription drugs, hospital prices, and utilization continued to put upward pressure on insurance rates.

That distinction matters. A large increase in a Marketplace benchmark premium is not the same thing as the increase an enrollee ultimately pays after subsidies, plan changes, and other enrollment decisions. The best way to understand the 2026 market is to separate insurer rate changes from actual consumer costs.

The Scale of the 2026 ACA Marketplace Premium Increase

According to the Urban Institute, ACA Marketplace benchmark premiums increased by an average of 21.7% from 2025 to 2026. By comparison, the same benchmark premiums grew by about 2.0% per year on average from 2020 through 2025.

The 21.7% figure refers specifically to ACA Marketplace benchmark premiums. It is not a measure of every type of health insurance in the United States.

The Commonwealth Fund reported a national median proposed premium increase of 18% for 2026. That was more than twice the median proposed increase in 2025 and about three times the 2024 figure. The Commonwealth Fund figure describes insurer rate proposals, while the Urban Institute figure measures the change in benchmark premiums, so the two numbers should not be treated as interchangeable.

Premium Changes Varied by Marketplace Type

The increase also varied by how states operate their ACA exchanges.

KFF reported estimated benchmark premium increases of roughly:

30% in states using HealthCare.gov
17% in states operating their own state-based Marketplaces

The difference illustrates substantial geographic variation in the underlying premium changes. It does not by itself establish differences in consumer-navigation resources or other state-level services.

The Expiration of Enhanced ACA Tax Credits Changed What Consumers Paid

Enhanced ACA premium tax credits that had been available for several years expired at the end of 2025. Their expiration was a major contributor to higher net premium payments for many Marketplace enrollees in 2026.

Before 2026, KFF had projected that subsidized enrollees who stayed in the same plan could face a roughly 114% increase in premium payments when the enhanced credits expired. That was a pre-2026 projection, not the observed average increase for all Marketplace consumers.

What Actually Happened in 2026?

CMS reported that average net Marketplace premium payments increased from $113 to $178 per month, an increase of about 58% across all Marketplace consumers.

Several factors helped make the actual increase smaller than the earlier 114% same-plan projection. Consumers switched into lower-premium plans, many selected plans with higher deductibles and greater out-of-pocket exposure, and some people facing the largest increases left the Marketplace.

CMS also reported that 87% of 2026 Marketplace consumers received advance premium tax credits (APTCs). That differs from the 92% figure reported for 2025.

The practical lesson is important: a projected same-plan premium increase is not the same as the average amount consumers actually paid after changing plans and accounting for who remained enrolled.

Why Are Healthcare Costs Rising?

The premium story is not driven by subsidy policy alone. Underlying healthcare costs also continue to affect insurer pricing.

For the individual market, rising medical costs were a major driver cited in insurer filings. In detailed 2026 small-group filings, insurers commonly used medical-trend assumptions of about 9%, reflecting higher prices and utilization of healthcare services and prescription drugs.

The roughly 9% figure should be understood as a small-group filing benchmark, not a universal medical-inflation rate for every U.S. health-insurance market.

GLP-1 Drugs and Other Specialty Medications

Prescription-drug spending is another important part of the 2026 pricing discussion.

KFF’s review of insurer rate filings found that 27 insurers across 16 states and Washington, D.C. specifically mentioned GLP-1 drug costs as a factor in their 2026 filings.

The repeated appearance of GLP-1 costs in those filings indicates that insurers were treating the drugs as a meaningful component of projected pharmacy spending. It does not mean GLP-1 medications were the single cause of premium increases or that every insurer faced the same impact.

Other specialty treatments also put pressure on spending. High-cost cancer therapies, gene therapies, and certain physician-administered drugs can materially increase plan costs.

These treatments can be difficult to manage through benefit design alone because many are clinically necessary and expensive, although insurers can still use tools such as formularies, prior authorization, network arrangements, site-of-care policies, and cost-sharing structures.

Hospital Consolidation and Provider Pricing

Hospital and physician-practice consolidation is a longer-running structural issue in U.S. healthcare pricing.

Research from RAND has linked provider consolidation, including hospital acquisitions of independent physician practices, with higher healthcare prices in some markets. When providers have greater negotiating leverage, insurers may face higher reimbursement rates.

Higher provider prices can contribute to higher insurer claims costs and, over time, put upward pressure on premiums.

This is not a phenomenon unique to 2026, but it contributes to the underlying cost base on which annual premiums are built.

Employer-Sponsored Health Insurance Is Also Getting More Expensive

Employer-sponsored insurance is facing substantial cost pressure, although the increase is smaller and works differently from the ACA Marketplace shock.

Mercer’s final 2025 National Survey of Employer-Sponsored Health Plans projected employer health-benefit costs would rise by 6.7% in 2026, compared with nearly 9% if employers made no cost-saving changes.

Mercer also reported that 59% of employers planned to make cost-cutting changes to their health plans in 2026, up from 48% in 2025 and 44% in 2024.

These changes can include adjustments to plan design, employee cost sharing, networks, and other benefit structures. The 59% figure is a surveyed intention for 2026, not a count of employers already confirmed to have completed those changes.

Why Employer Costs Are Rising

Mercer and other reporting point to several overlapping pressures, including increased healthcare utilization after the pandemic, higher hospital labor costs, rising prescription spending, and broader medical-cost growth.

Employers can absorb some increases, but they may also respond by changing plan design or employee contributions.

How the Small-Group Market Compared

The small-group market faced serious pressure, but the proposed increases were generally less severe than the Marketplace benchmark increase.

Peterson-KFF Health System Tracker analyzed filings from 318 ACA-compliant insurers across all 50 states and Washington, D.C. It found a median proposed premium increase of 11% for the small-group market in 2026.

The proposals ranged from a 5% decrease to a 32% increase, showing how differently small businesses can be affected depending on their state, insurer, and workforce characteristics.

These figures describe proposed rates, not necessarily the final premiums every employer ultimately paid.

How Consumers Responded to Higher Marketplace Costs

Actual enrollment choices show how consumers responded to the 2026 pricing environment.

CMS data showed a substantial shift toward lower-premium Bronze plans:

Bronze-plan enrollment: about 30% in 2025 to 40% in 2026
Silver-plan enrollment: about 56% in 2025 to 43% in 2026

Bronze plans generally have lower monthly premiums but higher deductibles and greater potential out-of-pocket costs when medical care is used.

A consumer who moves from a Silver plan to a Bronze plan can therefore reduce the monthly premium while taking on more financial risk if significant care is needed. The right choice depends on expected medical needs, household cash flow, deductible exposure, and eligibility for other cost-sharing assistance.

What Consumers Can Do About Higher Health Insurance Costs

1. Compare Plans During Open Enrollment

Comparison shopping is one of the most effective ways to respond to a premium increase. Compare plans based on the full cost structure rather than premium alone.

Pay particular attention to the premium, deductible, out-of-pocket maximum, provider network, prescription coverage, and expected use of medical services.

2. Recheck Marketplace Income and Household Information

Marketplace subsidy eligibility can depend on household income and family size. Keep those details current when applying or renewing coverage.

A change in income or household circumstances can affect eligibility for premium assistance and other cost-sharing support.

3. Review the Formulary

If you take specialty drugs or GLP-1 medications, review each plan’s formulary and related coverage rules before enrolling.

Two plans at the same metal level can have different formularies, utilization-management requirements, preferred pharmacies, or cost-sharing structures.

4. Consider an HSA-Eligible High-Deductible Plan Carefully

For people who are eligible, a high-deductible health plan paired with a health savings account can provide tax advantages and may reduce monthly premiums.

However, the lower premium does not eliminate the higher deductible. An HSA strategy works best when the household can contribute consistently and has enough liquidity to handle healthcare expenses before the deductible is met.

5. Use an FSA When Appropriate

Employees who are not enrolled in HSA-compatible coverage may be able to use a flexible spending account, depending on their employer plan.

FSAs can provide tax advantages for eligible medical expenses and can help reduce the effective after-tax cost of healthcare.

6. Read the Summary of Benefits and Coverage

Before enrolling in a plan, request and review the Summary of Benefits and Coverage (SBC).

The SBC can make it easier to compare premiums, deductibles, cost sharing, and other major coverage features across plans.

What Small-Business Owners Can Do

Small employers facing higher premiums can evaluate more than the headline renewal rate.

Plan design, cost-sharing structures, provider networks, employee contributions, and other benefit options can influence the total cost of coverage.

The widening use of benefit adjustments in 2026 suggests that employers are increasingly considering plan design alongside premium negotiations. The specific options available depend on the employer’s size, plan type, insurer, and applicable rules.

Looking Ahead: What the 2026 Surge Signals

The 2026 increase does not come from a single cause, and it should not be interpreted as a simple reversal of artificially suppressed premiums.

Urban Institute analysis points to the interaction of medical-cost growth, the expiration of enhanced premium tax credits, and other federal policy changes. The underlying medical-cost pressures remain relevant even if subsidy policy changes again.

The detailed 2026 small-group filings that used roughly 9% medical-trend assumptions illustrate the continuing pressure from healthcare prices and utilization. GLP-1 medications were also identified in 27 insurer filings, showing that drug spending remains an active part of pricing decisions.

Hospital and physician consolidation can also continue to put upward pressure on healthcare prices as insurers negotiate future contracts.

For consumers, the most actionable step is to treat open enrollment as an active financial decision rather than a passive renewal. The 10-percentage-point shift toward Bronze plans shows that many households are already making trade-offs between monthly premiums and exposure to deductibles and other out-of-pocket costs.

For employers, Mercer reporting that 59% planned cost-cutting changes in 2026 shows how benefit redesign has become a common response to rising costs.

Conclusion

The 2026 health-insurance cost increase is best understood as a combination of higher underlying healthcare costs, policy changes, and changes in consumer and employer behavior.

ACA Marketplace benchmark premiums rose 21.7% from 2025 to 2026, while the actual average net premium paid by Marketplace consumers increased from $113 to $178 per month, or about 58%.

The expiration of enhanced premium tax credits was a major contributor to higher net premium payments, but the actual 2026 outcome was shaped by plan switching and changes in who remained enrolled. The earlier 114% same-plan projection should therefore not be presented as the observed average increase.

Underlying medical-cost growth remains another major pressure. Detailed small-group filings commonly used approximately 9% medical-trend assumptions, while GLP-1 drugs and other specialty treatments appeared in insurer rate filings as important cost considerations.

Employer-sponsored and small-group plans also faced higher costs, although the magnitude differed from the Marketplace increase. Mercer’s final 2025 National Survey projected a 6.7% employer health-benefit cost increase in 2026, versus nearly 9% without cost-saving changes, while 59% of employers planned benefit cost-cutting measures.

For consumers, the most effective response is not simply to choose the cheapest premium. Compare plans carefully, review networks and formularies, consider the full deductible and out-of-pocket exposure, keep Marketplace income information current, and use HSAs or FSAs when appropriate.

The 2026 market rewards active comparison. A lower premium can reduce monthly costs, but the right health plan is the one that provides an acceptable balance between premium, coverage, network access, and potential out-of-pocket spending.

Frequently Asked Questions

How much did ACA Marketplace premiums increase in 2026?

Urban Institute analysis found that ACA Marketplace benchmark premiums rose by an average of 21.7% from 2025 to 2026. This is a benchmark-premium measure, not the average amount every consumer paid.

How much did Marketplace consumers actually pay in 2026?

CMS reported that average net monthly Marketplace premium payments increased from $113 to $178, which is about a 58% increase across all Marketplace consumers.

What happened to the 114% premium increase reported before 2026?

The 114% figure was a KFF projection for subsidized enrollees who stayed in the same plan after the enhanced premium tax credits expired. It was not the observed 2026 average for all Marketplace consumers.

Did 92% of Marketplace enrollees receive enhanced tax credits in 2026?

No. CMS reported that 87% of 2026 Marketplace consumers received advance premium tax credits. The 92% figure applied to the prior-year population used in earlier analyses.

Why did ACA premiums rise so much in 2026?

Several factors contributed. These include rising healthcare costs, the expiration of enhanced premium tax credits, prescription-drug spending, changes in the Marketplace risk pool, and other federal policy changes.

How much did employer health insurance costs rise in 2026?

Mercer’s final 2025 National Survey projected employer health-benefit costs would rise 6.7% in 2026, compared with nearly 9% if employers made no cost-saving changes.

How many employers planned to change their health benefits in 2026?

Mercer’s survey found that 59% of employers planned to make cost-cutting changes to their health plans in 2026, up from 48% in 2025 and 44% in 2024.

Why are GLP-1 drugs affecting insurance premiums?

GLP-1 medications can represent a significant pharmacy-spending category. KFF found that 27 insurers across 16 states and Washington, D.C. specifically mentioned GLP-1 costs in their 2026 rate filings.

Should I switch from a Silver plan to a Bronze plan to save money?

It depends on your expected healthcare needs and ability to handle higher out-of-pocket costs. Bronze plans generally have lower premiums but higher deductibles and cost sharing. Compare the total expected annual cost rather than the monthly premium alone.

What should I compare when shopping for health insurance?

Compare the premium, deductible, out-of-pocket maximum, provider network, prescription formulary, cost sharing, and expected healthcare use. Review the plan’s Summary of Benefits and Coverage before enrolling.

Sources

Last updated: August 22, 2026. Health-insurance premiums, subsidies, plan availability, and employer benefit costs can change. Always verify current plan terms, eligibility, and official enrollment information before making a coverage decision.

Last updated on August 22, 2026 by admin