Millions of Americans are bracing for a tough financial blow in 2026, as health insurance premiums are set to rise at rates not seen in years. According to recent reports from the Kaiser Family Foundation and The Center Square, Affordable Care Act (ACA) health insurance premiums will spike by about 26% next year—the largest jump in eight years and a figure that towers over the current U.S. inflation rate of roughly 3%. For many families, this means a sudden, steep increase in monthly bills, and the reverberations will be felt far beyond those who buy insurance through the ACA marketplaces.
But the impact doesn’t stop with ACA enrollees. In fact, the vast majority of Americans—about 165 million people who receive health coverage through their employers—are also facing premium hikes. Forbes projects that employer-sponsored health insurance premiums will go up by approximately 6.5% in 2026, while small business health plans are expected to rise by around 11%, according to a report from OneDigital. These increases, though not as dramatic as the ACA’s, are still the largest in 15 years and are expected to outpace both inflation and employee wage growth.
“It is clear that the ACA’s policy of paying health insurance companies has not lowered health insurance costs for Americans, but quite the opposite,” Karen Harned, a small business expert and former executive director at the National Federation of Independent Business, told The Center Square. “Insurance premiums are going up for everyone, especially small businesses who have little margin to afford this.”
What’s driving these relentless price hikes? A perfect storm of factors: rising hospital and prescription drug costs, ongoing consolidation among healthcare providers, the expansion of coverage for expensive new treatments like GLP-1 weight loss drugs, and fresh uncertainty from tariffs on drugs and medical devices introduced by the Trump administration. According to Mercer’s 2025 survey of employer-sponsored health providers, employers expect to spend 6.7% more per employee in 2026, the highest increase in a decade and a half. Large employers have seen drug spending alone rise 9.4% in 2025 as coverage for costly treatments expands.
For workers, the pain doesn’t end with higher premiums. Beth Umland, director of research for health and benefits at Mercer, told CBS News, “Workers could see an increase in the cost-sharing provisions in the design as well—higher co-pays, higher deductibles—so it’s getting hit on both ends.” In 2025, the average family coverage premium for employer-sponsored plans hovered near $27,000, with workers shouldering about $6,850 of that cost. With average wages expected to rise just 3.1% in 2026, these health cost jumps will quickly outpace pay increases, squeezing household budgets even tighter.
The expiration of Covid-era subsidies and tax credits for ACA plans is a particularly sharp blow. Nearly 24 million people buying insurance on the ACA marketplaces benefited from these subsidies, but the recent government funding deal will let them lapse at the end of the year. The result? Premiums could jump by $1,000 or more for many ACA enrollees in 2026, according to The Independent. This situation has become a flashpoint in Washington, fueling heated negotiations and even dividing political allies.
Republicans in Congress, anticipating voter backlash ahead of the 2026 midterm elections, have been hunting for solutions. However, their refusal to expand ACA subsidies remains steadfast. Instead, some have floated alternatives such as expanding health savings accounts (HSAs). Senator Bill Cassidy, for example, has proposed redirecting funds from ACA subsidies into HSAs for qualifying Americans. He’s also filed the No Upcode Act, which aims to limit insurers’ ability to increase government payments by adjusting billing codes—a move his office says could save $124 billion over ten years.
Yet, these proposals have drawn sharp criticism from Democrats. Senate Finance Committee Chairman Mike Crapo, R-Idaho, recently convened a hearing to address rising health costs and the ballooning share of federal spending tied to insurer reimbursements. During this session, Senate Democrats argued that Republican ideas fall short. “Republicans refuse to help Americans lower their premiums,” Sen. Ron Wyden said. “Half-baked ideas that put more taxpayer dollars into health tax accounts will enrich big banks and insurance companies while saddling Americans with high premiums and deductibles.”
The debate has even fractured Republican unity on health care, with some party members breaking ranks. Rep. Marjorie Taylor Greene, for instance, sided with Democrats during the recent government shutdown negotiations, calling for the ACA subsidies to remain. This stance contributed to a public falling out with former President Donald Trump, highlighting just how contentious the issue has become within the GOP.
Meanwhile, employer groups are growing increasingly vocal, arguing that Congress’s focus on the ACA marketplace is too narrow. They point out that employer-sponsored plans cover nearly seven times as many people as ACA plans, and they want lawmakers to address broader cost drivers like provider consolidation and lack of price transparency. Elizabeth Mitchell from the Purchaser Business Group on Health summed up the frustration: “We all use the same delivery infrastructure. When hospitals lose Medicaid or other public coverage, they try to recover those losses by charging private plans more. Everyone pays somehow.”
As open enrollment for both ACA and Medicare plans approaches, millions of Americans are left wondering how they’ll manage the looming increases. The messy cycle of rising medical costs, lagging wages, and political gridlock shows no sign of easing. With health care affordability now a top concern for voters, both parties promise to make it a headline issue in the next election cycle. Yet, as premium notices arrive and paychecks fall short, many families will be left asking: will Congress’s next fix finally reach them?
For now, Americans can only brace for the coming wave of health care costs and hope that lawmakers find a way to ease the burden before the next round of bills comes due.
