Perfect storm to hit Obamacare: Millions of Americans could see insurance premiums surge 75% in 2026 [View all]
A perfect storm of rising health care costs, expensive new drugs, and the scheduled end of enhanced federal subsidies could drive Obamacare’s Affordable Care Act (ACA) Marketplace premiums to their steepest levels in years—and hit more than 24 million Americans in their wallets.
According to a new analysis of insurers’ 2026 filings by Peterson-KFF’s Health System Tracker, the median proposed premium hike across 312 marketplace insurers is 18%. Most increases range from 12% to 27%, with more than 125 insurers seeking hikes of 20% or more—the sharpest climb since 2018. Final rates will be locked in by late summer 2025.
What’s driving the surge
Runaway medical costs remain the primary culprit, with hospital services, physician visits, and prescription drugs, especially the booming category of GLP-1 medications for diabetes and weight-loss, leading the trend. Insurers report medical inflation running at 8% to 10% annually. Some have even dropped coverage for weight-loss GLP-1s in an attempt to contain costs.
Layered on top of that is a looming policy shift: the expiration of enhanced premium tax credits enacted in 2021 as part of pandemic relief. If Congress lets these subsidies lapse at the end of 2025, monthly out-of-pocket costs for subsidized enrollees are projected to jump roughly 75% on average. That hike is on top of, not instead of, insurers’ base premium increases. The subsidy rollback alone explains about 4 percentage points of the proposed 2026 rate jumps, partly because insurers expect healthier customers to drop coverage when subsidies shrink, leaving a riskier pool.
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