Health insurance is about to get a whole lot more expensive. If you are used to annual premium bumps, 2026 will feel like a gut punch. This won't be a small uptick. It is shaping up to be the biggest jump in over a decade.
Employees with job-based plans could see premiums rise by 6% to 7%. That's the sharpest hike in 15 years. And it doesn’t stop there. Some employers plan to shift more of the cost to workers by raising deductibles or out-of-pocket limits. In other words, you will pay more even before your insurance kicks in.
If you buy coverage through the ACA marketplace, buckle up. Insurers are proposing premium hikes of up to 20%. The median ask is 18%, which is still steep. If enhanced subsidies expire, some people could see their out-of-pocket costs jump by more than 75%!
Healthcare Prices Are Up, and So Is Usage
To begin with, healthcare itself is pricier. Doctors, hospitals, and outpatient services all cost more than they did a year ago. That’s nothing new, but the growth rate is accelerating. Medical trend rates are running at 8% annually. That’s unsustainable.
Nguy / Unsplash / People are using their insurance more often. There is a clear uptick in doctor visits, mental health appointments, and ER trips.
After the pandemic, many people put off care. Now they are catching up, and it is driving costs up across the board.
If you have heard of Ozempic or Wegovy, you already know where this is going. GLP-1 drugs are in high demand, especially for weight loss and diabetes. They’re effective, but they aren’t cheap. Some insurers report a 25% to 30% increase in pharmacy costs every quarter.
Specialty drugs are another beast. Gene therapies, cancer treatments, and other cutting-edge meds cost a fortune. These drugs make up more than half of total drug spending, yet only 2% of patients use them.
Labor Costs and Mergers are Shrinking Competition
It is becoming more expensive to run hospitals and clinics. Healthcare workers are in short supply, and wages are up. To cover those higher payrolls, providers are demanding more money from insurers, which leads directly to higher premiums.
Another problem? Mergers. Hospitals are consolidating, which means fewer players at the table. Less competition equals more pricing power for big hospital chains. They set the terms, and insurers don’t have much leverage to push back.
One major issue is that those boosted ACA subsidies could vanish in 2026. If that happens, marketplace enrollees will feel the pinch right away. The financial help many rely on could dry up overnight.
Scott / Unsplash / Tariffs on medical supplies and drugs might make everything costlier. The impact is still being sorted out, but if the price of basic supplies jumps, insurers will pass those costs along.
AI is making its way into billing systems. Sounds great in theory, but in practice, it helps providers squeeze every dollar they can out of insurance companies. It’s optimized billing, not cost control.
Meanwhile, mental health care is in high demand, and that’s adding to overall costs. Employers don’t want to scale back access, but it’s another line item that’s growing fast. It is a balancing act between offering support and managing spend.
Nearly 60% of employers plan to make changes to curb spending in 2026. That means higher deductibles, bigger copays, and possibly less coverage for certain medications like GLP-1 drugs. Some plans might drop weight-loss coverage entirely or require prior approvals to limit access.