Health Insurance Premiums and Out-of-Pocket Costs to Rise Sharply in 2026
Health insurance premiums across employer-sponsored commercial plans, Medicare, and the Affordable Care Act (ACA) exchanges are projected to rise significantly in 2026, outpacing general inflation rates. Employer-based plans are expected to see an average premium increase of 6.5%, more than double the inflation rate, alongside substantial growth in deductibles and out-of-pocket costs. This increase relates to higher utilization of medical services and technology, including increased doctor visits, emergency room use, mental health claims, and expensive prescription drugs for complex conditions.
ACA exchange premiums are poised for even steeper hikes, with insurers requesting a median increase of 18% for 2026, which is the highest since 2018. The expiration of enhanced ACA tax credits implemented during the COVID-19 pandemic threatens to escalate consumer premium costs sharply, potentially resulting in a 75% to 90% increase for many enrollees if subsidies are not extended. This could lead to significant affordability challenges for middle-income families and individuals in the individual market without subsidy eligibility.
Meanwhile, certain Medicaid recipients are at risk of coverage loss in 2026 due to new federal work requirements tied to the ACA expansion, potentially shifting a less healthy population into the individual insurance market and increasing claims costs. Medicare beneficiaries will also face premium increases, with Part D outpatient drug premiums rising by 6% and Part B outpatient services premiums increasing by approximately 12.6%, reflecting the maximum allowable adjustment under federal law.
The health insurance cost trend over the past two decades shows a persistent and significant rise, with family premiums in employer-sponsored plans increasing nearly 300% since 2000. Worker contributions have also quadrupled, while the prevalence of high-deductible health plans has grown, heightening the financial burden on insured individuals before coverage benefits apply. This pattern of premium inflation coupled with rising deductibles and cost-sharing requirements underscores ongoing affordability concerns.
Overall, the sustained increase in premiums, deductibles, and out-of-pocket expenses amid evolving utilization patterns and regulatory shifts presents complex challenges for the U.S. health insurance market. These dynamics influence consumer access, insurer risk pools, and the broader affordability landscape for health coverage across employer-sponsored, ACA, Medicaid, and Medicare programs.