The Real Reasons Your ACA Healthcare Premiums Went Up This Year and What to Do About It

Starting today, Nov. 1, millions of people shopping for healthcare through the ACA marketplace will face severe sticker shock. The Affordable Care Act (ACA) Marketplace goes by a number of different names; some examples: HealthCare.gov, Covered California, MNsure, BeWell New Mexico. Congress was unable to agree on extending government healthcare subsidies, and now, 2026 healthcare premiums in the ACA marketplace will double, or even triple for some. 

A KFF analysis shows premium payments could soar from $888 to $1,904, a 114% increase from 2025 to 2026. This will result in millions having to risk not having health coverage next year, rather than pay the sticker shock prices.

While Congress can make a deal before January 15th (the end of open enrollment), it may be too late. Since it’s logistically very complicated to make rate changes retroactively, states may opt not to go through the hassle.

The WorkMoney team has put together a comprehensive guide to explain how we got here, why medical care costs are rising, how these changes in ACA impact them, and what, if anything, you can do to minimize your healthcare costs in the new year.

The Current Picture of Health Insurance

The current picture of health insurance for many Americans looks bleak, as more people struggle to meet the rising costs. Before we dive into how health insurance costs are changing for 2026, here’s a look at the current landscape.

Here’s an approximate breakdown of where consumers get their health insurance plans from, according to recent data from KFF:

• 48.6% are insured through employer-sponsored plans

• 21.2% are insured through Medicaid

• 14.7% are insured through Medicare

• 6.2% are insured through non-group plans including ACA marketplace plans

• 1.3% are insured through the military

• This leaves roughly ~8% of Americans uninsured.* 

*These numbers are expected to change now that subsidies are gone.

Next, let’s break down overall spending and implications:

Annual U.S. health care spending reached $4.9 trillion or $14,570 per person in 2023, according to the Centers for Medicare & Medicaid Services. However, healthcare spending in the U.S. is very unevenly distributed. In 2022, the top 1% of people ranked by their healthcare expenditures accounted for over 21% of total healthcare expenditures. While a small number of people account for most of the total cost of healthcare spending, that doesn’t mean that people aren’t struggling with healthcare expenses.

In 2024, 36% of households had medical debt, 21% had a past-due medical bill, and 23% were on a payment plan for a medical bill, according to a recent journal. This debt mound is estimated at $220 billion.

What’s Causing Healthcare Costs To Skyrocket?

Here are a few core factors causing medical costs to increase: 

• Subsidies are ending: Healthcare subsidies will end at the end of December, skyrocketing healthcare premiums for 2026. This creates a doom-loop scenario: millions will drop coverage amid price increases, making the pool of insured customers smaller. And for those who do keep their plans, many will likely be older or have ongoing medical needs—driving up costs and making the marketplace’s “risk pool” more expensive for everyone.

• Hospital costs are rising, and are expected to continue upward. Consulting group PwC expects costs to continue upward between 7-8% in 2026.

• Those with healthcare insurance policies are using more of their benefits, known as benefit utilization. This can be attributed to multiple factors, including access to virtual medical services and policyholders addressing postponed health services from the pandemic.

• Drug price pressures: U.S. drug spending jumped from $437 billion to $487 billion from 2023 to 2024, at net manufacturer prices. 

Healthcare Subsidies Were Here, And Now They’re Gone

During the Covid-19 pandemic, the federal government introduced enhanced premium tax credits for those who purchased health insurance through the ACA marketplace. Under the American Rescue Plan Act of 2021, households earning up to 150% of the federal poverty level (FPL) could obtain “zero-premium” plans, and premium contributions more broadly were capped at 8.5% of income, even for those earning above 400% FPL.

These subsidies were extended under the Inflation Reduction act until the end of 2025. Now, politicians are battling over extending these credits, as it could continue to add to the ever-growing federal deficit. 

The lack of subsidies entering into 2026 now makes many ACA plans much more expensive for many. For those who can’t stomach the additional cost, it will force them to go without insurance.

What You Can Do To Lower Your Costs

Despite costs soaring, there are still ways to stop the financial bleeding. To start, like with any insurance policy, it pays to shop around to find the best policy and the lowest premium. Use tools like Stride to get started. Additionally, there are a few other steps you can take to lower your overall healthcare costs in the new year.

Compare Networks and Drug Coverage

Before you decide to re-enroll in your current plan, double-check your plan’s provider network and drug formulary for 2026.

Many 2026 plans are narrowing hospital networks or adjusting prescription coverage tiers, especially under ACA marketplace plans, which could mean your provider or medication that is covered today, wouldn’t be next year. 

A quick review of your preferred doctors and medications to see if they are in-network and/or are covered under the new plan could save you hundreds—or prevent a costly surprise midyear.

Save on Prescriptions

Prescription medications can quickly add up, but there are simple ways to lower costs. Compare prices across pharmacies using tools like GoodRx, consider switching to FDA-approved generic alternatives (which consumers have saved billions doing so), and ask your doctor if a lower-cost or longer-lasting dosage is possible. Mail-order pharmacies and 90-day supplies can also reduce copays and save time.

Insurance coverage and manufacturer programs offer additional savings. Review your plan’s formulary during open enrollment to ensure your prescriptions are covered, and explore patient assistance programs or nonprofit support for expensive medications. By combining these strategies, families can cut prescription costs significantly without sacrificing care.

Use a Tax-Advantaged Savings Account To Offset Costs 

If your health plan qualifies, contributing to an HSA or FSA is one of the few legal ways to lower your healthcare costs through tax savings.

• A Health Savings Account (HSA) is a tax-advantaged savings account paired with a high-deductible health plan. 

• HSAs let you use pre-tax dollars to pay for medical and prescription expenses, dental and vision expenses, copays, and other eligible expenses — and unused funds roll over year to year.

• In addition to your own contributions, many employers contribute to employees’ HSAs as an added company benefit.

Writer’s note: I use an HSA to put funds aside for future medical expenses, and as part of my investing strategy.

• A Flexible Spending Account (FSA) is another tax-advantaged savings account allowing you to set aside pre-tax dollars to pay for eligible expenses. 

• Unlike an HSA, an FSA is not tied to a specific type of medical plan. However, your employer must offer it as a benefit. 

• FSA funds usually must be used within the plan year and don’t go with you if you leave your job. 

The tax advantages from these accounts may help offset some of your premium increase.

Final Thoughts

Just under half of U.S. adults say it’s difficult to afford health care costs, according to KFF. Surely, this number will rise as the subsidies have expired.

While we can’t control the cost of healthcare or premiums increasing, we do have the ability to budget and find a medical plan that is best suited for your needs. Be sure to shop your plan before the end of your open enrollment period.