ACA marketplace premiums set for sharpest increase since 2018
Median price hike of 18% predicted, with some going much higher
Insurers are proposing a median premium hike of 18% for 2026, with some increases reaching nearly 60%.
Rising healthcare costs, specialty drugs, and labor shortages are the biggest drivers of higher premiums.
The possible expiration of enhanced premium tax credits could push out-of-pocket costs for enrollees up by more than 75%.
Affordable Care Act (ACA) Marketplace health plans are on track for their steepest premium hikes in nearly a decade, according to a new analysis by KFF. Across 312 insurers in all 50 states and the District of Columbia, companies are seeking a median premium increase of 18% for 2026—roughly 11 percentage points higher than this year’s rate changes and the sharpest jump since 2018.
While some insurers are proposing cuts of up to 10%, far more are seeking significant hikes. More than 125 insurers have filed for increases of at least 20%, with the highest request topping 59%. Regulators will finalize 2026 rates later this summer.
Why costs are climbing
The filings reveal that rising healthcare costs remain the primary driver. Insurers cite higher prices for hospital and physician care, inflation-related labor costs, and escalating demand for high-cost prescription drugs—particularly GLP-1 medications like Ozempic and Wegovy—as key factors. Specialty drugs, including gene therapies, are also placing disproportionate pressure on premiums, with some insurers reporting that just 2% of enrollees account for more than half of all drug spending.
Labor shortages across hospitals and clinics have also fueled higher provider reimbursement demands, further straining insurer budgets. In some markets, hospital mergers and consolidation have reduced competition, allowing providers to negotiate steeper price hikes.
The role of federal policy
Insurers are also bracing for policy uncertainty. The enhanced premium tax credits—first expanded under the American Rescue Plan and extended by the Inflation Reduction Act—are scheduled to expire at the end of 2025. If Congress does not renew them, out-of-pocket premiums for subsidized enrollees could surge by more than 75%. Insurers expect that many healthier people would drop coverage in that scenario, leaving behind a sicker risk pool and driving underlying premiums even higher.
Other policy developments, including the new ACA Marketplace Integrity and Affordability rule and potential tariff-driven increases in medical supply costs, are contributing to insurers’ cautious outlook.
What it means for consumers
For now, most ACA Marketplace enrollees—92% of whom currently receive subsidies—may be shielded from the full brunt of these hikes if tax credits remain in place. But if federal subsidies lapse, millions could face sharply higher premiums and potential coverage losses, creating renewed uncertainty for the marketplaces just as enrollment has reached record highs.