Why Your Health Insurance Expenses Might Soar in 2026, and Steps to Take Now

Health insurance costs are expected to rise sharply in 2026, whether you receive coverage through your employer or buy health insurance off the exchange.

Over half of large employers (those with 500 or more employees) say they’re likely to shift more health costs to their workers, according to a survey conducted by Mercer, a consulting firm. This could mean raising premiums, deductibles, or prescription drug costs.

Meanwhile, insurers on the Obamacare marketplaces plan to increase premiums by a median of 18%, an analysis by KFF found—and prices are expected to soar 75% if ACA plan subsidies are not extended by Congress by Dec. 31. “The expiring tax credits at the end of the year would really have a large impact on on a population that is already facing extremely steep increases for their premiums,” said Lynne Cotter, senior health policy research manager for KFF, a nonprofit organization that provides research and analysis on national health issues.

Since most adults under 65 receive health insurance from their employers or ACA plans, the financial impact could be widespread. We spoke to experts to find out what’s driving the increases, and how you can prepare.

What’s Driving the Increase in Health Care Costs In 2026?

Cotter said rising health care costs are driven by higher demand for care, an aging population, and growing use of expensive treatments like GLP-1s (such as Ozempic) and gene therapies.

“On average, people are getting sicker. They are using more health care and so that is increasing premiums for next year,” said Cotter. “Inflation is included there and also rising labor costs.”

In Mercer’s survey, the cost of specialty drugs per employee increased 8% in 2024. As a result, some insurers have said they’re scaling back coverage of these medications or are requiring prior authorization from a doctor.

“While the trend over the past couple of years has been to add coverage for GLP-1s approved for weight-loss, some employers facing large cost increases in 2026 may feel this coverage is out of reach,” said Alysha Fluno, pharmacy innovation leader for consulting firm Mercer. “Employers are weighing the immediate costs of covering these drugs against the potential for generating savings down the road once their workforce’s health improves.”

Who’s Most at Risk for Big Increases?

People who buy health insurance on the marketplace could feel the biggest impact from rising prices. Those in certain states may be more affected than others. In Colorado, where two insurance providers have announced they’re exiting some counties, insurers have asked state regulators to approve price hikes that average out to 28%. In Arkansas, requests are in the 43% to 59% range, and in New York, UnitedHealthcare has asked for a 66.4% increase.

The potential expiration of the advanced premium tax credits at the end of the year could substantially increase the cost of plans available on the exchange even more. KFF’s analysis finds that premiums would increase by an average of 75% once the enhanced credits go away, not including insurers’ median estimated 18% hike for 2026.

These enhanced tax credits, first passed by the Biden administration in 2021, resulted in a huge increase in the number of people with ACA coverage. According to KFF, the number of people with marketplace plans grew by 113% from 2020 (before the enhanced credits) to 2025.

“The majority of people receiving ACA coverage receive advanced premium tax credits, and so most people will be impacted by the expiration of these credits,” said Cotter. 

For a family of four making $100,000, the expiration of these subsidies could result in a $178 increase in the monthly premium—or $2,140 annually—for a silver plan. 

Due to the potential increase in premiums for marketplace plans, Cotter expects many healthy people to drop their health insurance, further driving up the cost of premiums for remaining participants. 

How to Prepare for Higher Costs

Regardless of how you get your health insurance, Melissa Caro, certified financial planner (CFP) and founder of My Retirement Network, recommends paying close attention to the details of the plans before enrolling.

“A lot of families don’t realize what their deductible, coinsurance, or out-of-pocket maximum means until a bill shows up. Understanding those numbers helps you budget for the “what ifs” instead of being blindsided,” Caro said in an email to Investopedia.

Crystal McKeon, a CFP and chief compliance officer for TSA Wealth Management, recommends that young, healthy people opt for high-deductible plans to take advantage of health savings accounts (HSAs). HSAs offer triple tax benefits: Contributions are tax-deductible, the money grows tax-free, and withdrawals are also tax-free when used for qualified medical expenses.

When it comes to prescriptions, consider using sites like GoodRx to compare drug costs across pharmacies and find coupons. Also, look into generic equivalents for prescriptions and ask your doctor to prescribe those instead of name-brand drugs.

If you still find yourself on the hook for a pricey hospital bill, there are options—consider calling the hospital or medical practice to negotiate the bill, inquire about assistance, and more.

“If bills start piling up, don’t ignore them. Request an itemized bill (errors are common), ask about prompt-pay discounts or financial assistance programs, and negotiate a payment plan before it goes to collections,” Caro said.

Nonprofit hospitals must provide financial assistance due to their tax-exempt status, so if you meet the hospital’s eligibility criteria, you could qualify for discounted or free health care even if you have insurance.