The Affordable Care Act (ACA) insurers are proposing their largest premium hikes since 2018. Most insurers are requesting an average increase of 15% for 2026, with over a quarter proposing hikes of 20% or more. According to Cynthia Cox from KFF, this is “the most significant increase we’ve seen in over five years.” These proposed increases are a direct response to the anticipated expiration of enhanced subsidies, which have kept premiums low for many Americans.
The looming expiration of enhanced ACA subsidies at the end of this year is the primary driver of these premium increases. Once the additional aid expires, monthly premium payments are expected to rise by an average of 75% for those receiving subsidies. For instance, a family of three earning $110,000 annually with a ‘Silver‘ ACA plan could see their monthly cost jump from $779 to $1,446 in 2026 if subsidies expire, and up to $1,662 with a 15% premium increase.
Causes of Premium Increases
The enhanced subsidies, created by the American Rescue Plan Act in 2021 and extended by the Inflation Reduction Act in 2022, allowed low-income enrollees to obtain coverage with very low or no premiums. These subsidies also enabled middle-income Americans to qualify for assistance for the first time. The Biden administration stated that most enrollees could select plans for less than $10 a month due to these subsidies, boosting ACA enrollments to a record 24 million by 2025.
Policies from the Trump administration, aimed at weakening the ACA, also contributed to significant rate hikes in 2018. Besides subsidies, tariffs on pharmaceutical imports imposed by the Trump administration are cited by some insurers, adding 3% to their premium proposals. A new rule from the Centers for Medicare & Medicaid Services (CMS) finalized in June introduces several changes, such as shortening the open enrollment period and increasing verification requirements, impacting premiums in a “mixed” manner.
Additional Consequences
Nearly 4 million people are projected to lose their coverage next year if subsidies are not extended, adding to the nearly 12 million expected to lose coverage due to health program spending cuts. With fewer enrollees, especially healthier ones, insurers would need to spread costs among a smaller, “sicker” pool, further driving up premiums. Some may retain coverage by paying more or switching to plans with higher deductibles, like “bronze” or “catastrophic” plans, which have lower monthly premiums but require more out-of-pocket spending.
A major insurer, Aetna, has already announced its exit from the ACA individual market in 2026, citing an inability to provide the same level of value. Aetna had previously exited the Obamacare exchanges in 2018 before returning. Not extending the subsidies could be politically risky, as many consumers, both Democrats and Republicans, rely on this assistance. In 2024, 56% of ACA enrollees lived in Republican congressional districts, and 76% in states won by Trump.
The proposed rates for 2026 are preliminary and subject to change. State regulators have a say in setting final rates. Consumers will see final premiums shortly before the open enrollment period begins on November 1. Congress could still act to extend the subsidies, with ongoing discussions about potential “middle ground” solutions, such as allowing subsidies for families earning up to five or six times the poverty level.
