As Americans prepare for the 2026 health insurance open enrollment period, the cost of coverage is set to rise sharply for millions—whether they buy insurance through the Affordable Care Act (ACA) Marketplace or get it through their employer. New analyses from MoneyGeek and Mercer reveal a challenging landscape: ACA Marketplace premiums are projected to increase by an average of 20% nationwide in 2026, while employer-sponsored health insurance will cost more than $18,500 per employee, a 6.7% jump from the previous year.
According to MoneyGeek’s comprehensive review of official rate filings from all 50 states and Washington, D.C., the average ACA Marketplace premium hike masks dramatic differences among states. Eleven states will see increases exceeding 30%, with Arkansas leading the pack at a staggering 67% jump—from $494 to $823 per month for a 40-year-old’s Silver-tier benchmark plan. Other states facing eye-watering increases include New Mexico (+50.7%), Tennessee (+38.4%), and Texas (+34.2%). The largest hikes are concentrated in states that rely solely on the federal exchange and have not implemented stabilizing policies such as Medicaid expansion or reinsurance programs.
“Our findings show states with active market management consistently demonstrate greater stability and slower rate growth,” Nathan Paulus, Head of Content at MoneyGeek, stated. “The pattern holds across multiple policy dimensions.” The study, which weighted each state’s premium increase by its 2024 Census population, found that states with Medicaid expansion, state-run marketplaces, or reinsurance programs experienced smaller and more stable rate changes. For instance, Alaska saw its premiums drop by nearly 3% thanks to its reinsurance program, while New York and Vermont kept increases under 6%—though their baseline premiums remain high due to community rating rules.
Regional disparities are stark. Southern states are bearing the brunt of the increases, averaging 29% premium growth—more than triple the 9% average in the Northeast. This regional gap reflects policy choices: Southern states are less likely to have expanded Medicaid, run their own marketplaces, or operate reinsurance programs. Of the nine states that haven’t expanded Medicaid, eight saw above-average premium growth.
MoneyGeek’s statistical analysis underscores the impact of state policy levers. Medicaid expansion states posted approximately 8 percentage points lower premium growth than non-expansion states (20.2% vs. 28.0%). State-run marketplaces saw 5 percentage points lower increases compared to those using the federal Healthcare.gov platform (18.6% vs. 23.6%). Reinsurance programs correlated with 4 percentage points lower growth (19.2% vs. 23.3%). States combining all three protections—Medicaid expansion, reinsurance, and a state-run marketplace—reported the most stable premiums, with increases in the low-teens range.
While roughly 92% of ACA enrollees receive subsidies that reduce out-of-pocket costs, the looming expiration of enhanced federal subsidies on December 31, 2025, is raising alarms. The Congressional Budget Office estimates that, without a permanent extension, the number of uninsured people will rise by 3.8 million annually from 2026 to 2034. For the approximately 2.4 million unsubsidized consumers—often self-employed or early retirees earning just above subsidy limits—the full weight of premium hikes will be felt. For example, a 40-year-old earning $65,000 could see their monthly premium climb from $540 in 2025 to $740 nationally, or $820 in Arkansas, if subsidies expire.
But the pain isn’t limited to the ACA Marketplace. Mercer’s 2025 National Survey of Employer-Sponsored Health Plans, released in November 2025, found that the average cost of employer-sponsored health insurance reached $17,496 per employee in 2025, a 6.0% increase—outpacing both inflation and wage growth. Looking ahead, Mercer projects a 6.7% increase in 2026, pushing average costs above $18,500 per employee.
Prescription drug spending is a major driver of these increases, rising 9.4% on average among large employers in 2025. Notably, 49% of large employers covered expensive GLP-1 weight-loss medications in 2025, up from 44% in 2024, contributing to higher costs. In nearly all employer-sponsored health plans, costs are shared with employees through paycheck deductions and plan design features that shift some financial responsibility to plan members when they access care. As overall costs rise, so too do employees’ share of the burden.
Mercer’s earlier survey of over 2,000 US workers found that 28% of those with household incomes at or below the median were not confident they could afford necessary healthcare. “Employers want to minimize increases in paycheck deductions while ensuring employees across all pay levels can afford the care they need, when they need it,” said Ed Lehman, Mercer’s US Health and Benefits Leader. “It’s a tough challenge, but there are ways that employers can make healthcare more affordable for employees.”
Among the affordability strategies gaining traction: offering more medical plan options, guiding employees to high-performing providers, and providing specialized health programs. The survey found that 35% of large employers now offer at least one plan that directs employees to smaller networks of higher-performing providers. In addition, 67% of large organizations offered three or more medical plans at their largest worksite in 2025, up from 60% just two years prior. Tracy Watts, Mercer’s US Leader for Healthcare Policy, observed, “We expect this trend will continue, as these newer plans tend to cost less and offer more affordable benefits to the plan member.”
Plan design matters. In Preferred Provider Organization (PPO) plans, employees pay an average monthly premium contribution of $191 for individual coverage, with a deductible of $1,064. High-deductible Health Savings Account (HSA) plans, by contrast, have a lower average monthly contribution of $109 but a much higher deductible of $2,481. For employees who rarely hit their deductible, switching to an HSA plan could save hundreds of dollars—especially if they take advantage of tax-free HSA contributions.
Specialized, stand-alone programs for managing chronic health issues are also becoming more common. In 2025, 32% of large employers offered a diabetes program, 28% a musculoskeletal program, and 23% a fertility program. According to Mr. Lehman, “The best of these programs help members better manage their health conditions, which creates opportunities for both employees and employers to reduce healthcare spending over time.” Still, he cautioned, “Results are not a given. The key is having the right metrics to monitor program performance.”
As costs surge across both the ACA Marketplace and employer-sponsored insurance, the debate over how to make healthcare affordable for American families is intensifying. State and federal policymakers face tough decisions on premium tax credits and market reforms, while employers continue to experiment with new plan designs and targeted health programs. For consumers, the coming year will mean more careful shopping, more choices—and, for many, a heavier financial lift to maintain coverage.
