Americans are bracing for the biggest increase in health insurance costs in 15 years, with employer premiums set to climb about 6.5% and Affordable Care Act marketplace carriers proposing 2026 increases with medians between 15% and 18% in state filings [1][2][3]. Insurers attribute the spike to accelerating hospital prices, high-cost drugs including GLP-1s, labor pressures, and uncertainty around premium tax credits set to lapse after 2025 without new legislation [2][3]. The result: higher sticker prices for coverage and heavier pressure on household budgets and employers’ benefits spending [1][2].

Key Takeaways

– Shows employer health insurance premiums rising about 6.5% in 2025, the biggest overall jump in 15 years, intensifying wage and benefits trade-offs. – Reveals ACA marketplace filings for 2026 propose a 15% median premium increase, the largest since 2018, driven by hospital prices, drugs, and subsidy uncertainty. – Demonstrates an even higher 18% median across 312 insurers for 2026, double 2025’s 7% median, raising the risk of enrollment declines and weaker risk pools. – Indicates sharp state variation, with individual requests reaching 27% in Illinois and 21% in Texas, underscoring localized cost pressures and market dynamics. – Suggests mounting household pressure as employer plans average $7,871 per individual and $35,119 per family in 2025, with pharmacy and outpatient care leading costs.

Why health insurance premiums are jumping in 2026

The core drivers behind the run-up are familiar but intensified: hospital prices, specialty pharmaceuticals, and labor costs that have risen faster than overall inflation since the pandemic era [2]. Insurers filing 2026 ACA rates also point to the scheduled end of enhanced premium tax credits after 2025, which forces carriers to price in potential changes in net demand and risk mix if subsidies lapse [2][3]. That policy uncertainty compounds underlying medical trend and pushes filings toward the highest proposed increases since 2018 [2].

Market leaders are drawing special scrutiny. Analysts and policymakers are watching large multi-state carriers, including UnitedHealth and Centene, as bellwethers for pricing assumptions and market share dynamics in 2026 [1]. Some insurers also cite policy and trade factors—such as tariffs and drug supply-chain “repatriation” measures—that could add incremental cost to medical goods and pharmaceuticals, reinforcing upward pressure on base premiums [1]. In aggregate, the shift points to a pricing environment shaped simultaneously by medical inflation and policy risk [1][2].

The magnitude of the proposals is notable across data sets. A Kaiser Family Foundation snapshot of preliminary filings found a median 15% requested increase for 2026 plans, the largest since 2018 across the states analyzed at midyear [2]. A complementary Peterson-KFF review of 312 insurers’ submissions shows a higher, 18% median increase, roughly twice the 7% median rise in 2025, underscoring how quickly expected claims costs have escalated year over year [3]. Together, the studies signal a broad-based step-up rather than isolated outliers [2][3].

Insurers emphasize drug costs—particularly GLP-1s—as a key component of trend, alongside wage-sensitive hospital and outpatient facility prices that ripple through negotiated rate updates [2][3]. While net premiums for subsidized enrollees are largely tied to benchmark silver plans, rising sticker prices still increase federal subsidy spending and can alter plan selection, enrollment timing, and churn, especially if Congress does not extend enhanced credits beyond 2025 [2]. That nexus of medical trend and policy design is central to 2026 pricing [2][3].

Employer health insurance costs and the household squeeze

Employer-sponsored health insurance is also climbing. The 2025 Milliman Medical Index reports average costs of $7,871 per covered individual and $35,119 for a family of four, reflecting long-running growth largely led by outpatient facility care and pharmacy spending [4]. Overlaying that trend, employers are preparing for about a 6.5% premium increase, contributing to the steepest overall rise in U.S. health insurance costs in 15 years and sharpening choices between wages and benefits [1][4]. For many firms, especially small employers, the margin to absorb new increases is narrow [1].

The Milliman data emphasize the structural drivers: hospital and outpatient services, increasingly priced at facility rates, and specialty drugs with list prices in the tens of thousands of dollars per course [4]. These elements compound across plan years, creating a higher base from which each successive increase is calculated [4]. As employers head into 2025–2026 renewals, the interaction between utilization rebound, negotiated unit prices, and pharmacy trend explains much of the expected 6.5% bump [1][4]. That increment may appear modest next to ACA filings, but it hits a much larger covered population [1].

For households, the pressure manifests through premiums, cost sharing, and tax-advantaged contributions. Even with employer contributions, higher premiums and continued growth in pharmacy and outpatient facility costs mean families shoulder a larger share of nominal spending over time [4]. Because wages do not automatically adjust to benefits inflation, real take-home pay can lag when health benefits consume a larger share of total compensation [4]. The current cycle therefore risks reinforcing the long-term shift of compensation into health benefits rather than cash [4][1].

State filings show the sharpest ACA premium hikes since 2018

Rate filings point to the biggest ACA premium increases in years, with notable regional spikes. KFF’s midyear reading found a 15% median proposed increase for 2026 across the states it reviewed, the largest since 2018 and a marked step-up from 2025 [2]. A broader Peterson-KFF review of 312 insurers shows a still higher 18% median, underscoring that the trend is not confined to a handful of carriers or markets [3]. The 18% figure is double the 7% median filed for 2025 plans [3].

State-level extremes illustrate the range of market conditions. In publicly available filings, some carriers seek increases up to 27% in Illinois and 21% in Texas, citing input cost inflation, expensive therapeutics, and policy-related uncertainty [5]. Those double-digit requests sit against a backdrop where most on-exchange enrollees qualify for subsidies, which cap what many consumers pay relative to income but also increase federal outlays as sticker premiums rise [2][5]. Where fewer carriers compete, the impact on unsubsidized buyers can be particularly acute [2][5].

Enrollment dynamics could magnify the pricing cycle. Peterson-KFF warns that if enhanced premium tax credits expire after 2025, net premiums would rise for many enrollees, potentially depressing take-up, worsening risk pools, and creating further upward pressure on 2027 premiums [3]. Even absent a policy change, higher base rates can alter plan selection and metal-tier shifts, with second-order effects on risk adjustment and carrier strategy [2][3]. In short, 2026 is shaping up as an inflection point for ACA pricing and participation [2][3][5].

What higher health insurance costs mean for policy and markets

The near-term policy question is whether Congress extends enhanced premium tax credits beyond 2025. KFF notes that while most marketplace enrollees receive subsidies, higher sticker premiums mechanically require larger federal payments to keep net costs in line with statutory caps, increasing federal spending if credits are maintained [2]. If credits lapse, many consumers would see significant net premium increases, affecting enrollment and potentially reshaping marketplace risk pools and carrier participation in 2026 and beyond [2][3]. That makes the budget debate directly relevant to premiums [2][3].

Regulators may intensify oversight as filings move from preliminary to final. The Financial Times reports rising political and regulatory scrutiny of leading carriers’ pricing and cost assumptions, with attention on how hospital consolidation, drug pricing, and trade policies flow into 2026 rates [1]. Because filings must pass actuarial and solvency tests, states can press for adjustments, but their scope is bounded by documented medical trend and policy parameters [1][2]. The interplay between state review and federal subsidies will set the ultimate consumer experience in open enrollment [2][5].

For employers, a 6.5% premium increase requires trade-offs across wages, staffing, and plan design even if the rise looks smaller than the ACA proposals [1]. Milliman’s long-run trend data show the cumulative effect of mid-single-digit annual increases, compounded over two decades, which have steadily raised the baseline cost of coverage [4]. As medical inflation outpaces broader consumer inflation in certain categories, benefits managers face higher renewal risk and the challenge of maintaining coverage value within constrained budgets [4]. The result is sustained pressure on total compensation and corporate margins [1][4].

How consumers can navigate higher health insurance premiums

For ACA enrollees, shopping carefully during open enrollment remains critical. Because net premiums are tied to the benchmark silver plan, switching plans or tiers can limit net cost increases even when sticker prices rise, particularly for those eligible for subsidies [2]. KFF emphasizes that a majority of marketplace participants receive tax credits; however, changes in the level of enhanced credits after 2025 would alter net costs, so consumers should monitor policy developments closely [2]. The size of federal subsidies will track sticker premiums upward if credits are extended [2].

Consumers not eligible for subsidies, including many off-exchange buyers and early retirees, face the full brunt of increases and may benefit from comparing on- and off-exchange offerings to identify the best value at their income level [2][5]. Where carrier competition is limited, look closely at network composition and formularies, given the role of hospital and drug costs in driving trend and the potential for narrower networks or utilization controls in 2026 [2][5]. Paying attention to plan changes can mitigate some out-of-pocket risk even as premiums rise [2][5].

Workers in employer plans should track open-enrollment communications, since the combination of a 6.5% premium increase and rising pharmacy and outpatient costs can influence contributions, plan options, and covered services [1][4]. The Milliman Medical Index underscores how pharmacy and outpatient facility spending continue to shape total cost, informing decisions about coverage tiers and expected out-of-pocket exposure over the year [4]. While employers absorb a large share of premiums, employees’ contributions and cost-sharing typically move with trend, affecting household budgets [4][1].

Sources:

[1] Financial Times – Americans face biggest increase in health insurance costs in 15 years: www.ft.com/content/9af0c46d-4665-49ae-b153-15ce7d65ca55″ target=”_blank” rel=”nofollow noopener noreferrer”>https://www.ft.com/content/9af0c46d-4665-49ae-b153-15ce7d65ca55

[2] KFF – Insurers’ Preliminary Rate Filings Anticipate Biggest Increases in ACA Marketplace Plan Premiums Since 2018: www.kff.org/affordable-care-act/press-release/insurers-preliminary-rate-filings-anticipate-biggest-increases-in-aca-marketplace-plan-premiums-since-2018/” target=”_blank” rel=”nofollow noopener noreferrer”>https://www.kff.org/affordable-care-act/press-release/insurers-preliminary-rate-filings-anticipate-biggest-increases-in-aca-marketplace-plan-premiums-since-2018/ [3] Peterson-KFF Health System Tracker – How Much and Why ACA Marketplace Premiums Are Going Up in 2026: www.healthsystemtracker.org/brief/how-much-and-why-aca-marketplace-premiums-are-going-up-in-2026/” target=”_blank” rel=”nofollow noopener noreferrer”>https://www.healthsystemtracker.org/brief/how-much-and-why-aca-marketplace-premiums-are-going-up-in-2026/

[4] Milliman – 2025 Milliman Medical Index: www.milliman.com/en/insight/2025-milliman-medical-index” target=”_blank” rel=”nofollow noopener noreferrer”>https://www.milliman.com/en/insight/2025-milliman-medical-index [5] Wall Street Journal – Obamacare Insurers Seek Double‑Digit Premium Hikes Next Year: www.wsj.com/health/healthcare/obamacare-insurers-seek-double-digit-premium-hikes-next-year-454f1e1c” target=”_blank” rel=”nofollow noopener noreferrer”>https://www.wsj.com/health/healthcare/obamacare-insurers-seek-double-digit-premium-hikes-next-year-454f1e1c TARGET_KEYWORDS: [health insurance, ACA premiums 2026, employer premiums 6.5%, 15% median increase, 18% median increase, 27% Illinois rate hike, 21% Texas rate hike, Milliman Medical Index 2025, $7,871 individual cost, $35,119 family cost, GLP-1 drug costs, hospital price growth, subsidy expiration 2025, largest since 2018, 312 insurers filings, 7% median 2025, outpatient facility costs, pharmacy spending growth, federal subsidy spending, regulatory scrutiny] FOCUS_KEYWORDS: [health insurance, ACA premium increases 2026, employer health insurance costs, 15% median ACA hike, 18% median across 312 insurers, 6.5% employer premium jump, Milliman Medical Index 2025] SEMANTIC_KEYWORDS: [medical trend, premium tax credits, benchmark silver plan, unsubsidized enrollees, risk pool, utilization, negotiated rates, specialty drugs, hospital consolidation, actuarial filings, open enrollment, federal subsidies, cost sharing, plan design] LONG_TAIL_KEYWORDS: [why are ACA premiums rising in 2026, biggest health insurance increase in 15 years, employer premium increase 6.5 percent, KFF median 15 percent ACA rates, Peterson-KFF 18 percent median 312 insurers, Milliman $35,119 family of four 2025, GLP-1 drugs premium impact 2026, Illinois 27 percent ACA premium request, Texas 21 percent ACA premium request] FEATURED_SNIPPET: Health insurance costs are rising at the fastest clip in 15 years. Employers face about a 6.5% premium increase, while ACA marketplace filings propose median hikes of 15%–18% for 2026. Drivers include hospital price growth, specialty drug costs, and uncertainty around enhanced premium tax credits expiring after 2025. Subsidies will cushion many, but federal spending and market risk may climb without policy action.

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