Health insurance through Affordable Care Act faces big premium hikes
Health insurers are proposing double-digit price hikes for plans sold through Affordable Care Act marketplaces, as extra federal subsidies for premiums expire at the end of the year and President Donald Trump’s tariffs threaten higher pharmaceutical prices.
The median monthly premium increase would be 15%, according to a new analysis of insurer filings conducted by the nonpartisan health policy organization KFF.
The jump in costs would mark the largest premium hike in seven years, according to KFF’s analysis of preliminary filings by 105 insurers in 19 states and the District.
Those higher prices affect up to 24 million Americans who receive insurance through marketplaces and have struggled with affordability for years because of volatile costs.
More than a quarter of the insurers are requesting premium increases of at least 20%. Last year, just 3% of insurers boosted premiums by that magnitude.
Insurers could still walk the hikes back, but they have often followed through with earlier proposals to increase premiums for plans sold on the federal HealthCare.gov website and state-run marketplaces. Those marketplaces are a result of the Affordable Care Act, also known as Obamacare.
Separate from premium hikes, people face rising costs because extra federal subsidies to purchase Obamacare plans expire at the end of the year. The average person buying a marketplace plan would pay 75% more for their monthly premium if Congress doesn’t extend the subsidies, KFF said.
Premiums for marketplace plans typically rise every year, as costs for hospitals, doctors and medication go up. But insurers cited additional factors for next year, including the cost of new weight-loss drugs, labor market shortages and the expiration of the subsidies provided during the coronavirus pandemic.
Those subsidies made it easier for consumers to cover their monthly premiums. Congressional Republicans have criticized them and did not extend them in the sweeping domestic spending and tax bill they passed earlier this month. Insurers expect that more healthy people would stop buying plans when they lose subsidies, which would mean fewer premium dollars from healthier patients to cover the health care expenses of sicker ones.
Steep annual cost hikes for Obamacare plans aren’t a new problem. For years after the law’s health insurance marketplace began fully operating in 2014, consumers complained of double-digit increases. But premium hikes slowed in recent years as enrollment in the marketplaces steadily grew. If insurers go through with their proposed hikes for 2026, consumers would see the biggest cost increases since 2018, according to KFF.
The proposed rate hikes were submitted before the GOP bill passed and before the Trump administration in June finalized stricter rules around marketplace enrollment and eligibility. Those new policies could cause more healthy people to drop out of marketplace plans, requiring insurers to increase premiums.
This week, California and other Democratic-led states announced a lawsuit over the regulations, saying they will harm consumers and states.