WASHINGTON, D.C. — The cost of health insurance plans under the Affordable Care Act (ACA), widely known as Obamacare, is projected to rise significantly in 2026, threatening the affordability of coverage for millions of Americans. A new analysis from the Kaiser Family Foundation (KFF) found a median premium increase of about 18 percent for plans on the federal marketplace, which would be the largest spike since 2018. The price hikes are driven by a combination of inflation, rising medical costs, and the potential expiration of enhanced premium tax credits that have helped millions afford coverage.
Key Drivers of the Increase
Health policy experts and insurers point to several factors contributing to the expected surge in premiums. At the forefront is the looming expiration of federal subsidies. Enhanced premium tax credits, first implemented in 2021, have significantly reduced the cost of coverage for millions of ACA enrollees. Without an act of Congress to extend them, these credits will expire at the end of 2025. According to KFF, this could result in an average premium increase of 75 percent for enrollees who receive the credits, effectively doubling costs in some states.
Beyond the political and financial backdrop of the tax credits, insurers are also citing fundamental increases in the cost of medical care. This includes rising prices for hospital services, which have been affected by market consolidation and workforce shortages, as well as the soaring cost of specialty drugs.
“What’s different for 2026 is that we’re also seeing insurers talk a lot about federal policy,” said Cynthia Cox, a vice president at KFF, in a recent interview. “The main reason insurers plan to raise rates is that they expect Congress to let the enhanced subsidies… expire.”
Insurers’ filings with state regulators also reveal a growing concern about the rising utilization and cost of new, high-priced treatments, particularly glucagon-like peptide-1 (GLP-1) drugs used for diabetes and weight loss. One insurer’s filing noted an expected increase in costs due to “the significant increase in utilization of the glucagon-like peptide-1 (GLP-1) drugs” and the shift from older, less expensive medications to higher-cost versions.
The Potential Impact on Enrollment
The projected price increases, especially in the absence of the enhanced subsidies, could lead to a substantial drop in enrollment. Analysts from KFF project that if the subsidies are not extended, millions of Americans could become uninsured. The people most likely to drop their plans are those who are relatively healthy and may choose to forgo coverage due to the high cost. This would create a less healthy “risk pool” of remaining enrollees, who are more likely to have chronic conditions and require more expensive care. This demographic shift would, in turn, drive premiums even higher for those who stay enrolled, creating a cycle of increasing unaffordability.
The Affordable Care Act has been a central pillar of U.S. health policy for over a decade, providing coverage to millions of previously uninsured Americans. The program’s success is often measured by its enrollment numbers, which reached a record high of 24 million people this year, largely due to the enhanced subsidies. The potential for a significant portion of these enrollees to become uninsured once again is a major concern for public health officials and policymakers. For more information on the ACA and its administration, visit the Centers for Medicare & Medicaid Services (CMS) website.
While some states have explored their own public options or alternative programs to combat rising costs, many are watching and waiting for Congress to act. The future of the enhanced subsidies, and the affordability of health care for millions, now rests in the hands of federal lawmakers. The debate over whether to extend the credits will be a central feature of the coming legislative season, as consumers anxiously await a decision that will directly affect their financial and physical well-being.