Health Insurance Premiums To Rise Well Above Inflation For Most
Health insurance premiums are expected to rise in 2026 at levels not seen in at least 15 years, impacting most Americans enrolled in various healthcare plans. According to Mercer’s National Survey of Employer-Sponsored Health Plans, individuals with employer-sponsored health insurance can anticipate a 6.5% increase in premiums next year, more than double the inflation rate. This increase will result in hundreds, if not thousands, of dollars in additional annual expenses for policyholders. Additionally, deductibles and out-of-pocket co-payments are projected to rise significantly, further burdening American workers with healthcare costs.
Several factors are driving the surge in premiums, including increased utilization of healthcare services and technologies, as well as higher prices across the board. Doctor visits, emergency room usage, mental health services, and prescription drug costs have all seen a substantial uptick in recent years, especially post-pandemic. Affordable Care Act exchanges are expected to experience even more significant premium hikes than the employer-sponsored market, with insurers seeking a median 18% increase for 2026.
The expiration of tax credits that many Americans rely on to afford their premiums could further exacerbate the affordability of insurance. Subsidized ACA enrollees have been shielded from premium increases due to these credits, but without them, costs could rise by up to 75% for most individuals and 90% for those in rural areas. Some outliers may face massive premium increases, with one family in Connecticut potentially seeing their monthly premium quadruple without subsidies.
In addition to increased costs for consumers, approximately five million adults who currently have Medicaid coverage through the ACA expansion could lose their insurance in 2026 due to a federal work requirement policy. As healthier individuals exit the ACA marketplaces, those with more significant healthcare needs may face exorbitant premiums and out-of-pocket costs.
Medicare beneficiaries are also expected to feel the impact of rising premiums, with Part D and Part B premiums projected to increase by 6% and 12.6%, respectively, in 2026. Elisabeth Rosenthal of KFF Health News highlights the significant rise in health insurance premiums over the past 25 years, with family premiums surging by 297% since 2000.
The trend of high-deductible health plans has also become more prevalent, with deductibles for employer-based plans increasing nearly 50% since 2015. This out-of-pocket expense can be significant, with the average deductible for an employee of a large firm reaching $3,547 in 2023. Americans have grown accustomed to paying more for less in healthcare, with insurers placing more restrictions on prescription drug coverage while raising premiums and cost sharing.
Overall, the escalating costs of health insurance and healthcare have put a strain on individuals and families across the country. A Gallup Poll released earlier this year found that nearly 91 million adults say they wouldn’t be able to afford needed medical care, highlighting the growing financial burden of healthcare in the United States.
