2026 Health Insurance Premiums Set to Surge Across Markets

Health insurance premiums across various coverage types in the U.S., particularly in the Long Island region, are set to rise significantly in 2026, impacting millions of Americans. This includes increases in plans offered through the Affordable Care Act (ACA), Medicare, employer-sponsored insurance, and state-regulated plans. The average premium for ACA plans assisted by federal tax credits is expected to increase by about 32%, with many of these credits set to expire at the end of 2025 without federal intervention, further escalating out-of-pocket costs for consumers. Long Islanders currently exhibit insurance coverage rates exceeding 95%, but those relying on ACA subsidies, approximately 28,000 individuals, face substantial premium hikes. Employer-sponsored plans are projected to increased by an average of 6.5%, marking the highest rise since 2010, while small-group plans in New York could see premiums rise by 13%, and individual non-group plans by over 7%. Medicare premiums are anticipated to increase by approximately 10%. Key drivers of premium increases include hospital consolidation, demographic shifts including an aging population, and rising costs of medical services. These escalating premiums pose affordability challenges, particularly for middle- and low-income families who often depend on ACA tax credits. With rising costs, some consumers may shift to lower-cost but higher out-of-pocket plans or even forgo coverage, a decision that could lead to broader insurance market cost increases. Higher premiums also put financial pressure on household budgets, reducing disposable income and potentially affecting local economies, especially in high-cost areas like Long Island. Small business owners are particularly exposed to these changes, as many are connected to the ACA marketplace and face compounded financial pressures from inflation and regulatory changes. The expiration of enhanced ACA premium tax credits threatens increased financial burdens on households earning up to 400% of the federal poverty level, with possible implications for insurance uptake and market stability. Nearly half of adults under 65 with individual ACA coverage are linked to small businesses either as employees, self-employed individuals, or business owners, magnifying the relevance of these premium hikes for the small business community. Public policy uncertainty remains a significant factor, highlighted by recent Senate decisions that rejected bills to extend ACA subsidies or create alternative health savings accounts, leaving market participants and consumers unsure about future subsidy landscapes. This uncertainty combined with premium growth could discourage entrepreneurship and lead some existing business owners to seek employment with employer-sponsored insurance to secure more stable coverage. Analysts note that rising premiums have outpaced Social Security cost-of-living adjustments, putting additional strain on retirees relying on these fixed incomes. The increased financial pressure may compel affected individuals to seek additional income sources or adjust their healthcare coverage strategies to manage costs. State regulatory bodies have approved some of the larger premium increases for state-regulated plans, although at levels below insurers' initial requests, indicating a degree of regulatory moderation amid rising cost pressures. Overall, the forecasted health insurance premium increases in 2026 underline ongoing challenges in the U.S. health insurance market related to cost inflation, demographic trends, regulatory dynamics, and the stability of subsidy programs, with widespread implications for consumers, small businesses, and the broader economy.