WASHINGTON, D.C. — Millions of Americans enrolled in Affordable Care Act (ACA) health plans are bracing for a potential double whammy in 2026: significantly higher premiums coupled with a sharp reduction in federal subsidies. Insurers are seeking average premium increases of 15% nationwide, according to initial filings analyzed across 19 states and the District of Columbia. This jump is more than double the 7% median increase seen for the 2025 plan year and represents the largest proposed hike in over five years.
The increased costs are driven by a confluence of factors, including rising medical and labor expenses. However, a significant portion of these proposed hikes is attributed to uncertainty surrounding the future of enhanced, COVID-era ACA tax subsidies. These subsidies, which have made coverage more affordable for millions, are set to expire at the end of December. If Congress fails to extend them, many consumers could face substantial out-of-pocket costs, potentially leading to them going uninsured.
“The out-of-pocket change for individuals will be immense,” stated JoAnn Volk, co-director of the Center on Health Insurance Reforms at Georgetown University. “Many won’t actually be able to make ends meet and pay premiums, so they will go uninsured.”
For the 24 million people currently relying on ACA plans, this situation could be a stark reminder of the impact of policy decisions. While other potential changes, like increased paperwork or Medicaid spending cuts, may take longer to materialize, the immediate hit from spiking ACA premiums, especially as midterm elections approach, is likely to stir political debate.
Joshua Brooker, an insurance broker in Pennsylvania who closely monitors legislative actions, noted that discussions are happening on Capitol Hill. “I am hearing on both sides — more from Republicans, but from both the House and Senate” — that they are looking for ways to mitigate these subsidy reductions.
Key Takeaways
- Insurers are proposing a median premium increase of 15% for ACA plans in 2026.
- This is up from a 7% median increase for the 2025 plan year.
- The hikes are driven by rising medical costs and the potential expiration of enhanced federal subsidies.
- If subsidies expire, average premium costs for consumers could rise by over 75%.
- Some experts estimate ACA enrollment could drop by as much as 57% if tax credits lapse.
These proposed rate increases are not uniform. In Maryland, for instance, insurers requested increases ranging from 8.1% to 18.7%. New York, however, shows a wider disparity, with one carrier asking for less than a 1% increase, while another seeks 66%. Without the extension of enhanced ACA tax credits, Maryland’s average statewide increase could remain at 17.1% instead of shrinking to 7.9%.
Insurers are attributing these increases to several factors. Underlying medical costs, including the use of expensive obesity drugs, are estimated to add about 8% to premiums. Additionally, most insurers are factoring in an extra 4% to account for the potential lapse of the enhanced tax credits.
Chris Bond, a spokesperson for the industry’s lobbying group AHIP, stated that insurers are “doing everything in their power to shield consumers from the rising costs of care and the uncertainty in the market driven by recent policy changes.” AHIP is urging lawmakers to extend the health care tax credits to prevent “skyrocketing cost increases for millions of Americans in 2026.”
The enhanced subsidies, initially part of the American Rescue Plan Act in 2021 and extended through the Inflation Reduction Act in 2022, expanded eligibility and increased the amount of financial assistance available based on income and premium costs. These subsidies removed caps that previously prevented higher earners from receiving partial assistance. For these individuals, the amount they contribute toward premiums was capped at 8.5% of their household income.
The impact of these larger subsidies has been significant, fueling record enrollment in ACA plans, particularly among lower-income policyholders. However, these subsidies also come with a substantial price tag. The Congressional Budget Office estimates that a permanent extension could cost $335 billion over the next decade.
A policy law signed by former President Trump on July 4, which he dubbed the “One Big, Beautiful Bill,” did not include an extension of these enhanced subsidies. If no legislative action is taken, the subsidies will revert to their less generous pre-pandemic levels at the end of the year.
This means two major shifts for consumers: a greater share of premium costs will fall on enrollees as federal assistance declines, and individuals with household incomes exceeding four times the federal poverty level (which is $84,600 for a couple or $128,600 for a family of four in 2025) will no longer qualify for any subsidies.
“There will be sticker shock,” warned Josh Schultz, strategic engagement manager at Softheon, a New York consulting firm serving approximately 200 health insurers. Many of these insurers are anticipating a drop in enrollment.
Estimates from The Wakely Consulting Group suggest that the combination of expiring tax credits, new paperwork requirements, and other provisions from the former administration’s law could lead to a sharp decline in ACA enrollment, potentially as much as 57%.
According to analysis from KFF, insurers have already added approximately 4% to premiums to cover the anticipated cost of the expiring enhanced tax credits, anticipating lower enrollment. This scenario, they argue, would further inflate costs as a smaller, sicker pool of members remains enrolled.
Some insurers are also building in increases related to anticipated effects of tariffs. Cynthia Cox, a KFF vice president and director of its Program on the ACA, noted that some filings account for a potential 3-percentage-point premium increase due to tariffs driving up drug costs.
Consumers will see their new premium prices in the fall, just before open enrollment for the ACA begins on November 1.
Discussions are ongoing in Congress, and some lawmakers are exploring potential middle-ground solutions. These might involve extending subsidies to families earning up to five or six times the poverty level. However, any such proposals are likely to face opposition.
Conservative think tanks, like the Paragon Health Institute, argue that the more generous subsidies have led to income misrepresentation and fraud. Conversely, many consumers across the political spectrum have come to depend on this additional financial help. Politically, allowing these subsidies to expire could be a risky move, as 56% of ACA enrollees in 2024 resided in Republican congressional districts, and 76% were in states that voted for former President Trump.
The potential expiration of enhanced subsidies could also reshape the health insurance market. Brooker anticipates some individuals may forgo coverage altogether, while others might opt for plans with lower premiums but higher deductibles. A provision in the former president’s new tax law allows individuals enrolled in “bronze” or “catastrophic” ACA plans to qualify for health savings accounts.
“Naturally, if rates do start going up the way we anticipate, there will be a migration to lower-cost options,” Brooker added.
