ACA premiums likely to rise in 2026, KFF finds

Insurers are likely to propose sharp increases in premiums for Affordable Care Act plans next year, according to a new report from KFF.

Early indications are that individual market insurers will be increasing premiums in 2026 by more than they have since 2018, the last time policy uncertainty contributed to sharp premium increases. Across 105 ACA Marketplace insurers in 20 markets (19 states and the District of Columbia), premiums are increasing by a median of 15%. These filings are still preliminary and may change, KFF said.

While several factors drive premiums changes – the cost of medical care is typically a big one – there are policy changes heading into 2026 that insurers expect will drive up their costs, thereby causing them to increase premiums beyond what they would otherwise charge.

There are a couple of different factors that insurers say could contribute to higher rates next year. Enhanced premium tax credits that make coverage more affordable will expire at the end of 2025, driving up out-of-pocket premium payments by over 75% on average. This is expected to cause healthier enrollees to drop their coverage and create a sicker risk pool. 

An earlier Peterson-KFF Health System Tracker analysis showed the expiration of enhanced premium tax credits raised proposed rates by an additional 4%, on average.

Another factor is that tariffs could drive up the cost of some drugs, medical equipment, and supplies. Some insurers report that tariffs – and the uncertainty around them – are driving rate increases about 3% higher than they otherwise would be.

Additionally, many insurers submitted proposed rates before the budget reconciliation legislation passed and the Centers for Medicare and Medicaid Services (CMS) finalized the Marketplace Integrity and Affordability rule. The legislation and rule make changes to how the Marketplaces operate and how people are enrolled. These changes were only finalized in early July and late June, respectively, and it is not yet clear how insurers may respond, said KFF.

WHAT’S THE IMPACT

Rising healthcare costs are also a significant contributor to rates rising next year, the data showed. For 2026, insurers commonly say the underlying cost of healthcare, or the medical trend, is similar to last year’s reported 8%. A number of insurers mention GLP-1 drugs having an upward effect on their costs, as well as healthcare labor market pressures impacting provider-contract negotiations.

The vast majority of insurers are also mentioning the impending expiration of enhanced tax credits, with most saying they will raise premiums by an additional 4% than they would if the enhanced tax credits were renewed. For the last five years, enhanced premium tax credits have increased the amount of financial assistance enrollees in ACA Marketplace coverage receive, lowering their monthly premium payments. If Congress takes no action to renew these enhanced tax credits, enhanced subsidies will expire at the end of 2025, which will cause premium payments for subsidized enrollees to increase by over 75% starting in January 2026. 

Insurers expect a large share of enrollees to leave the market, and that those enrollees will be healthier on average, thus leaving the risk pool sicker on average, said KFF.

Tariffs were mentioned less, with insurers saying they may impact the cost of pharmaceuticals. Of the insurers that publicly quantify the impact of tariffs, the impact on premiums is about 3%, on average.

Most ACA Marketplace insurers are requesting premium increases in the 10-20% range for 2026. But more than a quarter (27%) of insurers are proposing premium increases of 20% or more for 2026.

In recent years, premiums in this market have been relatively flat or grown only modestly for several years. Last year, just 3% of insurers increased premiums by 20% or more. No insurers have requested rate decreases for 2026, whereas in recent years at least some insurers did decrease premiums.

Finalized 2026 rate changes are expected to be published in late summer.

THE LARGER TREND

In December the Congressional Budget Office estimated that the expiration of enhanced subsidies for ACA plans – which are set to expire in 2026 – could drive up premiums in the individual market.

In a letter to Sen. Ron Wyden, chairman of the Committee on Finance, the CBO said that not extending the premium tax credit structure provided in the American Rescue Plan Act of 2021 (ARPA) would also increase the number of uninsured Americans.

It is likely, the agency said, that some people will exit the marketplaces and become uninsured due to higher out-of-pocket costs for premiums. Without an extension through 2026, the CBO estimates that the number of uninsured Americans would increase by roughly 2.2 million during that year.

And without a permanent extension, the number of uninsured people is projected to rise by 2.2 million in 2026, by 3.7 million in 2027 and by 3.8 million, on average, in each year over the period from 2026-2034.