Health insurance expenses across the United States are projected to rise significantly in 2026, with premium increases expected to exceed general inflation by a wide margin. Individuals covered through employer-sponsored plans, Medicare, and the Affordable Care Act (ACA) marketplaces will likely face higher monthly payments, alongside rising out-of-pocket costs such as deductibles and co-payments.
According to Mercer’s National Survey of Employer-Sponsored Health Plans, employees with workplace coverage are anticipated to pay an average of 6.5% more in premiums in 2026. This rate is more than double the expected inflation level. Depending on the type of plan, this could translate into hundreds or even thousands of dollars in additional annual expenses. At the same time, higher deductibles and co-payments are expected to further increase the financial burden on workers.
The upward pressure on premiums is being driven by multiple factors, including increased use of healthcare services, advancements in medical technology, and rising treatment costs. Utilization of services such as doctor visits, emergency care, and mental health support has grown in recent years, particularly following the pandemic. In addition, the cost of prescription medications—especially for conditions like cancer, diabetes, autoimmune diseases, and weight management—continues to strain healthcare budgets.
Premium hikes are expected to be even steeper in the ACA marketplace. Insurers are proposing a median increase of 18% for 2026, marking the largest jump since 2018 and a substantial rise compared to the previous year. In some states, proposed increases are even higher, adding to concerns about affordability.
The situation is further complicated by the potential expiration of enhanced federal tax credits that have helped many Americans afford ACA coverage. These subsidies, introduced during the COVID-19 pandemic, expanded eligibility and reduced premium costs based on income levels. Without an extension, the Congressional Budget Office estimates that insurance costs could rise by approximately 75% for many individuals and up to 90% for those living in rural areas.
Certain households may experience especially sharp increases. For instance, projections shared during a Connecticut legislative hearing indicated that a middle-income family currently paying under $1,000 per month for ACA coverage could see their premiums surge to more than $4,000 monthly if subsidies are not renewed.
Individuals who do not qualify for ACA subsidies may also face substantial cost increases in the individual insurance market, where premiums are typically higher and less regulated by income-based assistance.
Beyond private insurance, public programs are also expected to see cost adjustments. Medicare Part D premiums, which cover prescription drugs, are projected to increase by around 6% in 2026. Meanwhile, Medicare Part B premiums, covering outpatient services, are expected to rise by approximately 12.6%, potentially exceeding $200 per month.
In addition to rising costs, policy changes could reduce coverage for some Americans. An estimated five million adults currently enrolled in Medicaid through ACA expansion may lose their coverage in 2026 due to new federal work requirements. As healthier individuals exit insurance pools, the remaining population may consist of higher-risk patients, contributing to increased claims and further premium hikes.
Long-term trends show that health insurance costs have been climbing steadily for decades. Since 2000, family premiums have increased by nearly 300%, far outpacing wage growth and inflation. Recent estimates indicate that the average annual cost of an employer-sponsored family plan has risen to over $25,000, with employees contributing a significantly larger share than in the past.
High-deductible health plans have also become more widespread, shifting more upfront costs to consumers. A growing percentage of workers now face deductibles exceeding $2,000, and average deductibles have increased sharply over the past decade. In ACA marketplace plans, deductibles for standard silver-tier coverage have nearly doubled compared to ten years ago.
Overall, Americans are paying more for health coverage while often receiving fewer benefits. Insurers have introduced tighter restrictions on services such as prescription drug coverage, even as premiums and cost-sharing requirements continue to rise. Reflecting these pressures, a recent Gallup survey found that tens of millions of adults in the U.S. report being unable to afford necessary medical care, highlighting the ongoing challenges within the healthcare system.
