ACA Premiums in Tennessee to Rise 15% in 2026 Amid Tax Credit Expiration
Health insurance premiums through the Affordable Care Act (ACA) in Tennessee are projected to increase significantly in 2026, with a median hike of 15%—the largest since 2018. This increase is primarily attributed to rising medical costs and tariffs on medications and equipment, as well as the anticipated expiration of enhanced tax credits that have temporarily lowered costs and boosted enrollment. These tax credits are set to expire at the end of 2025, potentially raising consumers' out-of-pocket premium payments by over 75%. Currently, approximately 627,797 Tennesseans are enrolled in ACA plans for 2025.
The landscape for ACA coverage is also undergoing regulatory changes. The recent passage of legislation reducing some public assistance programs has introduced uncertainty among insurers regarding pricing and coverage strategies. Specifically, the discontinuation of a special enrollment period for low-income individuals and the end of automatic renewals require consumers to proactively update their income and related information annually to maintain coverage. This shift could impact enrollment dynamics and accessibility for lower-income populations.
Beyond the ACA marketplace, employer-sponsored health plans are also facing cost pressures. About half of large employers plan to offset rising insurance expenses by increasing employee financial responsibilities, such as higher deductibles, copayments, or out-of-pocket maxima. This reflects broader trends in payer and provider negotiations and cost management strategies within the health insurance market.
For insurance professionals and stakeholders, these developments signal the importance of monitoring regulatory changes, market responses to tax credit expirations, and employer cost-shifting tactics. Understanding these factors is crucial for anticipating premium trends, enrollment fluctuations, and compliance requirements within both public and private insurance sectors. Tennessee represents a case study in how federal policy adjustments and market forces converge to shape regional insurance affordability and accessibility.