US Health Insurance Premiums Surge Amid Rising Healthcare Costs

Health insurance premiums in the United States have been rising steadily and are now increasing at rates that outpace wages and overall inflation. From 1999 to 2023, premiums for employer-provided coverage have more than quadrupled, and from 2023 to 2024 alone, premiums rose by over 6% for both individual and family plans.

This trend is even more pronounced in Affordable Care Act (ACA) marketplace plans, where state regulators only review proposed rate increases exceeding 15%, allowing significant hikes in many states.\n\nFor 2026, proposed premium increases in the ACA marketplace are substantial, with some insurers like UnitedHealthcare in New York requesting hikes of over 66%, and average increases above 20% in states such as Washington and Rhode Island. These increases are underpinned by a cumulative 50% rise in health care costs since 2017, driven by factors including increased prices for drugs and medical supplies due to tariffs and changes in federal health care policies.\n\nThe expiration of certain premium subsidies and reductions in healthcare spending are expected to push approximately 16 million Americans out of health insurance coverage by 2034. This exodus, predominantly of younger and healthier individuals, will reduce the risk pool's overall health, leading to a higher cost base for insurers covering an older and sicker population segment.\n\nInsurance regulators have limited leverage in many states to constrain premium increases, balancing rate oversight with concerns about insurers exiting markets. Public option plans introduced in some states have faced challenges related to provider participation and access to care due to lower reimbursement rates.\n\nRising premiums are accompanied by increasing deductibles, further exacerbating out-of-pocket costs for insured individuals.

For ACA silver plans, the average deductible in 2025 is nearly $5,000, a significant jump from about $2,500 in 2014. Employer-based plans also show increased deductibles, averaging just under $2,000.\n\n

Large employers may leverage bargaining power to negotiate better terms for their employees, but small businesses often face limited options. The insurance market is likely to contract and become more focused on high-acuity populations as these trends continue, posing challenges for affordability and coverage in the U.S. healthcare system.