Experts are signaling a significant increase in health insurance costs for 2026, affecting premiums, deductibles, and other out-of-pocket expenses across various plans. Proactive financial planning and careful review of coverage options will be essential for consumers to manage these anticipated changes.
The potential expiration of key government subsidies is a primary driver of the expected cost surge. According to early estimates, some individuals enrolled in Affordable Care Act (ACA) marketplace plans could see their contributions increase by an average of 75% if legislative action is not taken.
Key Takeaways
- Health insurance premiums and cost-sharing are expected to increase significantly in 2026 for employer, Medicare, and individual plans.
- The primary factors include the potential expiration of enhanced ACA tax credits, rising hospital labor costs, and expensive specialty drugs.
- Some ACA plan holders could face an average contribution increase of 75% without government intervention.
- Experts advise consumers to actively shop for plans during open enrollment rather than allowing automatic renewal.
- Utilizing Health Savings Accounts (HSAs), Flexible Spending Accounts (FSAs), and strategic budgeting can help offset higher costs.
Why Health Insurance Costs Are Set to Increase
Several economic and policy factors are converging to drive up the cost of healthcare coverage. Understanding these elements is the first step for consumers to prepare for the financial impact in 2026.
Expiration of Enhanced Subsidies
A major catalyst for the projected increase is the scheduled expiration of the enhanced Affordable Care Act (ACA) premium tax credits at the end of 2025. These subsidies have helped millions of Americans afford marketplace health plans.
Understanding ACA Tax Credits
The American Rescue Plan Act of 2021 temporarily expanded the eligibility for and the amount of premium tax credits available to individuals and families purchasing health insurance through the ACA marketplace. These enhancements were later extended but are set to expire after 2025 unless Congress passes new legislation.
"The enhanced ACA premium tax credits are set to expire after 2025 unless Congress acts," said Dr. Annie DePasquale, a board-certified family physician and founder of Collaborating Docs. "That means many marketplace enrollees could see substantially higher net premiums even if they keep the same plan."
Rising Operational and Drug Costs
Beyond policy changes, fundamental costs within the healthcare system are escalating. Hospitals are facing higher labor expenses, which are often passed on to insurers and, subsequently, to consumers through higher premiums.
Additionally, the growing use of expensive specialty drugs, such as GLP-1 agonists for diabetes and weight loss, contributes to rising overall expenditures for insurance providers. Increased utilization of healthcare services as the population ages and seeks more care also plays a significant role.
Proactive Steps to Take Before Open Enrollment
With significant changes on the horizon, experts stress that 2026 is not the year for consumers to be passive about their health coverage. A hands-on approach during the open enrollment period will be crucial for managing costs.
Review Your Personal Healthcare Needs
Before the enrollment window opens, take time to assess your medical history from the past year. Whitney Stidom, vice president of consumer enablement at eHealth, advises consumers to consider any new doctors, medications, or anticipated major medical procedures for the upcoming year.
This review should also include a detailed look at your 2025 healthcare spending. Tally up your total payments for premiums, co-pays, deductibles, and other out-of-pocket expenses to establish a clear baseline for comparison.
"While some people like to stick with the status quo, shopping around and comparing plans from multiple insurers can help people save money, improve access to care and potentially contribute to overall well-being," Stidom stated.
Avoid Automatic Plan Renewal
Letting your health plan renew automatically can be a costly mistake, especially in a year with anticipated price hikes. Stidom emphasized that the benefits of actively shopping for a new plan often outweigh the convenience of auto-renewal.
Dr. DePasquale advises consumers to take specific actions: "Confirm your doctors and meds are in-network or formulary and re-estimate your household income if you’re on the marketplace — subsidies hinge on that number."
Navigating Your Health Coverage Options
Finding the right balance between cost and coverage requires careful comparison of the available plans. Whether you use the ACA marketplace, are eligible for Medicare, or are self-employed, opportunities to save money exist.
Savings Through Comparison
According to eHealth data, consumers who actively comparison shop for ACA plans can save an average of over $2,000 per year on premiums while maintaining similar benefit levels. For Medicare beneficiaries, comparing Medicare Advantage plans can lead to potential annual savings of over $1,800.
Affordable Care Act (ACA) Marketplace
For many Americans, particularly those without employer-sponsored insurance, ACA plans will likely continue to be the most affordable choice. The key is to compare different tiers of plans (Bronze, Silver, Gold, Platinum) and insurers to find the best fit for your health needs and budget.
Medicare for Eligible Individuals
For those aged 65 and older, navigating Medicare can be complex. Stidom noted that the average beneficiary has access to more than 40 different Medicare Advantage plans in their local area. Licensed insurance agents can provide guidance in comparing these numerous options from various insurers to find the most cost-effective plan.
Strategies for Gig Workers and the Self-Employed
Individuals without access to employer coverage must be especially diligent. Dr. DePasquale recommends that self-employed workers compare on-exchange plans with and without subsidies. "Consider an HSA-eligible bronze plan if you’re low-utilization, and set aside monthly cash for the deductible," she advised. It is also critical for this group to update their income with the marketplace during the year to avoid having to repay subsidies at tax time.
Financial Tools to Mitigate Rising Costs
Beyond selecting the right plan, several financial strategies can help absorb the impact of higher healthcare expenses. These tools provide tax advantages and encourage saving specifically for medical costs.
Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs)
HSAs and FSAs are powerful tax-advantaged accounts designed for healthcare expenses. An HSA, available to those with a high-deductible health plan (HDHP), offers a triple tax advantage.
- Contributions are pre-tax or tax-deductible.
- The money grows tax-free.
- Withdrawals for qualified medical expenses are tax-free.
Dr. DePasquale referred to the HSA as a "Swiss-army knife" because unused funds roll over indefinitely, allowing it to function as a long-term investment vehicle. FSAs are also valuable but typically have a "use-it-or-lose-it" rule, meaning funds must be spent within the plan year.
Improved Budgeting and Financial Planning
The most direct strategy is to plan for higher costs. Dr. DePasquale suggests consumers should not hope for lower prices but instead prepare for increases. She recommends building a dedicated medical sinking fund and paying down high-interest debt to improve cash flow.
Additionally, it is wise to research the cost of maintenance medications. Using generic drugs, patient assistance programs, or pharmacy discount cards can lead to substantial savings.
The Role of Preventive Care in Managing Expenses
Long-term cost management is also tied to personal health. Focusing on preventive care and healthy habits can reduce the need for expensive medical interventions down the road.
"If you’re currently in good health, the cheapest claim is the one you never file," Dr. DePasquale said. She advises individuals to stay current on vaccinations and recommended screenings, manage chronic conditions like high blood pressure early, and prioritize healthy lifestyle choices. Taking these steps can significantly lower lifetime healthcare spending.
