Tennessee Faces 15% ACA Premium Increase in 2026 Amid Tax Credit Expiration
Tennessee residents with health insurance purchased through the Affordable Care Act (ACA) face a significant median premium increase of 15% for 2026 plans, marking the largest surge in ACA premiums since 2018. This rise is attributed primarily to increased medical costs, tariffs on medications and medical equipment, and notably, the impending expiration of tax credits introduced during the Biden administration which currently help lower consumer premiums and encourage ACA enrollment.
The expiration of these tax credits at the end of 2025 is projected to lead to an average consumer premium payment increase exceeding 75%. Current enrollment data indicates that over 627,000 Tennesseans are covered via the ACA as of the 2025 open enrollment period. Market uncertainty persists due to recent legislative changes, including tax cut and spending laws that have directly affected public assistance programs related to healthcare coverage.
Additionally, regulatory changes will impact ACA enrollment processes. The recent legislation and accompanying federal rules are set to end special ACA sign-up periods for individuals earning less than 150% of the federal poverty level, which previously allowed year-round enrollment. This will require consumers to update income and eligibility information annually and end automatic plan renewals, potentially increasing administrative burdens and enrollment challenges.
Beyond ACA marketplace plans, employer-sponsored insurance in Tennessee is also expected to experience cost shifts. Industry surveys indicate over half of large employers are likely to increase out-of-pocket costs for workers through higher deductibles and copays in response to rising healthcare expenses. This trend may impact both ACA participants and non-ACA insured populations, reflecting broader market pressures on health insurance affordability.
These dynamics highlight evolving regulatory and economic factors shaping the Tennessee health insurance landscape for 2026, with implications for insurers, employers, and consumers. Stakeholders in the health insurance sector should anticipate premium volatility and prepare for compliance with new enrollment regulations and cost-sharing trends across coverage types.