Affordable Care Act premiums are expected to rise an average of 18% in 2026, according to the Peterson KFF Health System Tracker.
In 2026, 312 insurers nationwide are participating in the ACA marketplaces.
Most insurers proposed premium changes that fell between 12% and 27%. Four insurers proposed decreasing premiums while 125 requested premium increases of at least 20%, according to KFF.
The 2026 rates will be finalized later this summer.
WHY THIS MATTERS
The KFF analysis shows a median proposed premium increase of 18%, which is about 11 percentage points higher than last year. This is the largest rate change insurers have requested since 2018, the last time that policy uncertainty contributed to sharp premium increases, KFF said.
Reasons include rising healthcare prices; higher medical utilization, including that of high-priced drugs such as GLP-1s; and general market factors of increasing labor costs and inflation.
The implementation of tariffs may also be a factor, but to a lesser extent, KFF said. Tariffs could potentially put upward pressure on the costs of pharmaceuticals and medical supplies. Because so much is currently unknown about the effect of tariffs, and also due to changing federal policy, insurers vary in factoring tariffs into their premium rates.
One of the biggest factors in the proposed rate increases is the expected expiration of the enhanced premium tax credit at the end of this year, unless Congress acts. The tax credits were put into place when the ACA was signed into law in 2010, but President Biden, through the Inflation Reduction Act, expanded and enhanced the tax credits that lowered monthly premiums.
The end of enhanced tax credits would lead to out-of-pocket premiums for ACA marketplace enrollees increasing by an average of more than 75%, KFF said. Because of this, insurers are expecting healthier enrollees to drop coverage, which would lead to higher premiums.
THE LARGER TREND
During UnitedHealth Group’s Q2 earnings call last month, Timothy John Noel, CEO of UnitedHealthcare, said the company will continue to participate in the 30 markets it serves through the individual exchanges in 2026, but with a more conservative approach.
“We may need to make the difficult decision to exit select markets if we are unable to achieve the rates necessary for higher market-wide morbidity,” Noel said. “Additionally, due to the projected expiration of premium subsidies across the ACA market, our membership should decline significantly, and we are mindful of the potential for adverse selection dynamics as we reprice these offerings for next year.”
Email the writer: SMorse@himss.org