Health insurance premiums on the Affordable Care Act marketplace jumped 21.7 percent on average in 2026 as enhanced federal subsidies expired at the end of 2025, leaving millions of Americans facing sharply higher out-of-pocket costs for coverage.
The 21.7 percent increase in benchmark silver plan premiums — the second-lowest-cost plans that anchor federal subsidies — represents the steepest annual rise since 2018, according to research from the Urban Institute and Commonwealth Fund published in January 2026. This far outpaced the 6 to 7 percent increase projected for employer-sponsored insurance that same year.
The extraordinary jump stems directly from Congress allowing enhanced premium tax credits to expire on December 31, 2025. Those credits, which were expanded during the pandemic under the American Rescue Plan and extended through the Inflation Reduction Act, had reduced out-of-pocket premiums for millions of enrollees. Without them, insurers anticipated that healthier members would drop coverage, leaving a sicker and costlier risk pool.
Insurers factored this anticipated enrollment shift into their rate calculations, with the expected loss of healthy enrollees accounting for 4 to 6 percentage points of the total premium increase, according to the Commonwealth Fund analysis. Rising healthcare costs — including increased utilization of GLP-1 weight-loss drugs, labor shortages among healthcare workers, and provider consolidation — contributed another 6 to 7 percentage points. Other federal policy uncertainty accounted for the remaining 9 to 10 percent.
The consequences were swift and severe. By mid-2026, approximately 5 million people had dropped their ACA coverage as premiums doubled from 2025 levels, according to NPR reporting in June. The Urban Institute estimated that 7.3 million people would lose ACA coverage altogether due to the subsidy expiration, with 4.8 million becoming uninsured. Out-of-pocket premium payments for subsidized enrollees jumped by an average of more than 75 percent, transforming coverage from affordable to inaccessible for many households.
The 2026 premium surge marked a dramatic reversal from the prior five years, when ACA premiums had grown at an average rate of only 2 percent annually — slower than employer premiums, national health spending, and overall economic growth. That stability had reflected intense competition among insurers in the ACA marketplaces, where premium tax credits were tied to the second-lowest-cost plan, creating powerful incentives to keep prices low.
In 2026, that competitive pressure evaporated. Twenty-one states saw at least one insurer exit the marketplace entirely, with Aetna withdrawing from all regions where it had previously participated. The loss of insurers further reduced competition and contributed to higher premiums across remaining plans.
Sources
- Commonwealth Fund — analysis of 21.7 percent ACA premium increase in 2026, causes, and historical context
- Urban Institute — research on extraordinary ACA premium increases and enrollment impacts
- Peterson-KFF Health System Tracker — detailed analysis of 2026 premium rate changes and factors driving increases
- NPR — reporting on 5 million people dropping ACA coverage in 2026
- KFF — analysis of enrollment impacts and subsidy expiration effects
