Most Americans enrolled in employer-sponsored commercial insurance, Medicare and the Affordable Care Act exchanges will see their premiums increase in 2026 well in excess of general inflation or the consumer price index. Additionally, out-of-pocket costs for patients will go up for most, including deductibles and co-payments.
Workers with employer-sponsored health insurance can expect in 2026 to spend on average 6.5% more in premiums in 2026, according to a Mercer’s National Survey of Employer-Sponsored Health Plans. The 6.5% increase is more than twice the inflation rate. Depending on the plan, it will translate into hundreds if not thousands of dollars more annually spent on health insurance premiums. What’s more, it’s projected that employees’ deductibles and out-of-pocket co-payments will increase substantially next year, too, adding several hundreds of dollars more to American workers’ healthcare tab.
Several factors are driving the rise in premiums. It’s a combination of more utilization of services and technologies and higher prices. CNN reported that employers are preparing for the steepest increase in health benefit costs in 15 years. For example, doctor visits, emergency room usage and claims for mental health services have all risen sharply in recent years, particularly post-pandemic. Prescription drug costs are straining budgets. This includes treatments for advanced cancer, autoimmune conditions, diabetes and weight loss.
Affordable Care Act exchanges will likely see even more dramatic increases in consumer premiums than in the employer-sponsored market. ACA insurers are seeking a median 18% premium hike for 2026—the biggest since 2018 and well above last year’s 7% figure, recently released KFF data shows. Some states are reporting much higher proposed increases.
With tax credits that many Americans rely on to keep their premiums affordable due to expire, affordability of insurance will be at stake. Subsidized ACA enrollees have been mostly insulated from premium increases because such credits tie costs to their income. During the COVID-19 pandemic, the federal government created more generous tax credits for the ACA exchanges, which reached individuals earning up to around $60,000 a year. Without these enhanced subsidies on the exchanges, the Congressional Budget Office expects costs to rise by a whopping 75% for most people and 90% for those in rural areas.
Then there are certain outliers who could face massive increases in premiums. During a hearing this month in the Connecticut state assembly, James Michel, CEO of Access Health, testified that a family of five with an income of $130,000 who currently pays $991 a month for ACA coverage could have to pay $4,140 a month, starting on Jan. 1 unless Congress passes a bill to extend ACA subsidies.
Premiums may also skyrocket in the individual market for those who don’t qualify for ACA subsidies.
Besides the increased costs for consumers, it’s estimated that roughly five million adults who in 2025 have Medicaid coverage through the ACA expansion, could lose their insurance in 2026 under a federal work requirement policy that’s going into effect as a result of passage of the One Big Beautiful Bill.
As healthier individuals leave the ACA marketplaces, a larger share of sick patients remain, generating more claims. This leaves the remainder, folks more likely to purchase insurance because of poorer health, with potentially exorbitant premiums and out-of-pocket costs.
Premium increases are forecast to also impact Medicare beneficiaries. The base average monthly premium for the outpatient drug benefit called Part D is projected to increase by 6% in 2026 to about $39, which is the maximum allowable increase under one the Inflation Reduction Act’s provisions.
Medicare Part B premiums are expected to be over $200 a month in 2026, which represents a 12.6% increase. Part B covers outpatient services, including physician-administered drugs.
As Elisabeth Rosenthal of KFF Health News points out, while this year’s increases will be large, premiums in the health insurance market have risen enormously in the past 25 years. Family health insurance premiums have surged 297% since 2000. Workers have paid nearly four times more for the same coverage in employer-based plans as in 2000, far exceeding the inflation rate.
KFF estimates that the average cost of an employer-sponsored family plan was $25,572 last year, up from $6,438 in 2000. The amount contributed by workers rose from $1,619 in 2000 to $6,296 in 2024.
High-deductible health plans have also become more common, with 32% of employees facing deductibles of $2,000 or more. And deductibles for employer-based plans have risen nearly 50% since 2015. This is money insured enrollees must spend out-of-pocket before insurance kicks in. The Commonwealth Fund calculated in 2023 that the average annual deductible for an employee of a large firm was $3,547. For an employee of a small firm, it was $5,074. The situation in parts of the ACA marketplace has become worse over time. An average deductible for a standard ACA silver plan in 2025 is nearly $5,000, approximately twice what it was a decade ago.
What’s compounding the issue is that Americans have grown accustomed to paying more for less. This decades-long trend has seen health insurers placing more restrictions on prescription drug coverage, in particular, while raising premiums, deductibles and out-of-pocket cost sharing.
Taking a bird’s eye view of the cost of health insurance and healthcare, it’s no wonder that a Gallup Poll released earlier this year found that nearly 91 million adults say they wouldn’t be able to afford needed medical care.
