2026 Health Insurance Costs to Rise Due to Expensive Therapies and Market Shifts

Health insurance premiums are expected to increase significantly in 2026 across various U.S. markets, with the individual marketplace facing particularly steep hikes. This surge is driven by a rise in medical service utilization, including more emergency room visits and mental health claims, alongside expensive new therapies like GLP-1 drugs for diabetes and obesity. The phasing out of enhanced tax credits for Affordable Care Act marketplace plans may further amplify consumer costs, potentially raising coverage expenses by 75% or more if not renewed by Congress.

Insurers are also contending with a shift in the risk pool as healthier individuals drop coverage due to stricter fraud controls and eligibility verifications implemented post-pandemic. This leaves a higher concentration of sicker policyholders, increasing claims and pushing premiums upward. Employer-sponsored plans, while still largely absorbing premium costs, are moving toward shifting more out-of-pocket expenses onto employees, including higher deductibles and limited prescription drug coverage.

New gene and cancer therapies with exceptionally high one-time costs are increasingly influencing insurer expenditures, contributing materially to overall medical cost growth. Claims exceeding $3 million have been reported by insurers like Sun Life Financial, underscoring the financial impact of these novel treatments on group health benefits.

Coverage adjustments anticipated in employer-sponsored plans may include separate deductibles for pharmacy and medical benefits and restrictions on high-cost pharmaceuticals. Regional variance is expected, with some areas experiencing more pronounced changes based on local employer strategies and insurance market dynamics.

The overall insurance landscape is characterized by uncertainty, influenced by regulatory changes, cost pressures from advanced medical therapies, and evolving market behavior among consumers and employers. These factors collectively suggest a challenging environment for both insurers and insureds in controlling healthcare spending and maintaining affordable coverage options going into 2026.