When you’re putting together your monthly budget, you may already feel like your health insurance costs take a large chunk out of it. Unfortunately, Americans now may be facing a possible surge that would add significant amounts to those premiums. With some of the key premium tax credits that were put into place under the Affordable Care Act (ACA) set to expire, your marketplace premiums could double, or worse.

ACA funding was one of the major sticking points for the government shutdown of 2025. The program finally received funding that will run through September 2026, but the fact remains that millions of Americans stand to see a drastic increase in their monthly insurance premiums in the coming year.

Whether you’re one of the people facing this price increase or you are facing a change in your health insurance plan, it’s important to know what’s going on with premiums and what the latest news means for you.

Why Are Costs Increasing?

The primary reason for the increase in health insurance premiums is the impending end of enhanced Affordable Care Act subsidies. Those premium tax credits were expanded during the COVID-19 pandemic in an effort to keep marketplace premiums down for enrollees, many of whom were spending more on healthcare than before. According to recent analysis, if those credits expire as scheduled, the average premium payment for subsidized plans could more than double.

Some insurers have already submitted rate filings that show significant increases for 2026. One study shows an average requested rate increase of 18% on the national level, with some filings being far higher. These higher premiums reflect an ongoing price change in the healthcare field, including rising medical costs, inflationary pressure, increased utilization, and fear that healthier enrollees could leave the system entirely.

Weaker subsidy support and higher baseline costs combine to create a perfect storm. This increase may not only be a minor adjustment in health insurance costs, but a dramatic shift in affordability.

The Most Vulnerable Among Individual Market Enrollees

While some households may be able to absorb incremental increases, there is plenty of fear surrounding individual market enrollees who face serious exposure. Those who earn too much to qualify for state-funded Medicaid plans, while not making enough to absorb these rising costs easily, are especially at risk. For those individuals, the expiration of ACA subsidies comes at the worst possible time.

The Kaiser Family Foundation (KFF) recently published a study that shows that for those with incomes above the subsidy threshold, premium payments could drastically increase. For instance, individuals who earn around $28,000 per year may see their annual costs jump by roughly $1,200.

These figures mean that many families will be forced to make some tough choices. They may be forced to decide between stretching their budget, picking a plan that covers less, and dropping their insurance altogether. For younger or healthier members of the marketplace pool, dropping coverage becomes an option, but that raises risk for those who remain, potentially driving even higher premiums for the group.

Implications for the Health Insurance Market

While it may seem that these changes will only impact individuals who are enrolled in the ACA, analysts warn that the entire health insurance industry could be shaken by these changes. If subsidies vanish completely and premiums jump, the market may see healthier individuals leave the market entirely, leaving behind a pool of sicker patients. Insurers anticipate that risk in their filings, and the result could be a destabilization of premium pricing and reduced competition.

There are even some potential issues for health insurance plans that aren’t directly affiliated with the ACA. Employer-sponsored plans may run into similar inflationary pressure, which could lead to coverage gaps growing. While it’s believed that some states will step in with subsidies, the resources are expected to be huge and unevenly distributed.

This moment does serve as a stress test for policymakers. Will the system absorb subsidy expiration without significant disruption, or will we see a reversal of coverage gains made in recent years? Market analysts are watching closely, and the financial stakes, along with the personal stakes, are high.

What Should Consumers and Policymakers Do?

This is the perfect opportunity for people enrolled in the marketplace or considering their options to take proactive steps. Start by carefully reviewing your renewal notices and comparing your plan options. Changes in subsidies or premium increases may make different tiers or networks more or less attractive than they were in previous years. You’ll also need to be sure to consider how rising health insurance costs are going to fit into your overall budget. You may need to adjust your savings strategy, your spending, and other aspects of your usual financial plan. Finally, stay informed about policy developments. Decisions that are made in Washington, D.C. can ripple quickly into what you pay, a fact that already has millions of Americans concerned.

For policymakers, this is the time to act. Extending Affordable Care Act subsidies or finding alternative options to keep premiums in check can prevent worse outcomes. Each state needs to assess its ability to offer supplemental support. Regulators and policymakers must scrutinize insurer rate increases to ensure that rising health insurance costs reflect underlying care cost trends, not just risk shift or regulatory gaps.

Bracing for Impact

The warning signs are prevalent. Marketplace premiums are slated to rise sharply, and that means that many individual market enrollees could bear the brunt of rising costs of health insurance. While insurance will still be available, it may not be affordable for many families, particularly those already stretched thin by rising living expenses. Unless policymakers intervene to extend Affordable Care Act subsidies or implement alternative relief measures, the strain on household budgets could be substantial, and the consequences for overall enrollment could be severe.

In addition to changes in marketplace premiums, what happens next will also impact the stability of America’s healthcare system as a whole. If healthy individuals get chased out of the market by soaring prices, the cost for those left behind will increase at a faster rate than they’ve seen before.

Policymakers, state agencies, and consumers will all play pivotal roles in the months ahead. The stakes are high, and without intervention, the country may experience one of the most significant health insurance crises since the creation of the ACA.