Sticker Shock As Insurance Costs Rise In ACA And Commercial Markets

Open enrollment is happening. It’s the annual period during which individuals can adjust or switch plans or re-enroll in their current health plan. Individuals or families purchasing insurance on the Affordable Care Act marketplace will face steep increases in premiums of up to 30% on average. And for employees selecting plans in the employer-sponsored market—by far the largest insurance sector in America—they will pay 9% more for their insurance in 2026, which is more than three times the current rate of inflation.

On rising health insurance premiums, the main focus in the media has been on premium increases in the ACA exchanges as well as the expiring enhanced subsidies. However, a much larger number of Americans will be impacted by premium increases across the commercial markets. According to KFF, close to 165 million Americans receive health insurance through their employers. Surveys estimate premium increases of 9% in this market in 2026. And millions more obtain non-group individual coverage from commercial carriers where the spike in premiums is expected to be even higher.

STAT News reports that the total mean cost of a family health insurance policy through an employer is $27,000 in 2025. Of that, an average of $6,850 gets paid by the employee and $20,143 by the employer. Experts predict that the aggregate cost will increase to nearly $30,000 next year. Several factors appear to be driving the rise in healthcare spending and premiums, which include greater utilization of medical services and technologies and higher prices. Furthermore, patient cost-sharing will continue its inexorable rise with higher deductibles and out-of-pocket payments for covered services and items such as prescription drugs.

Healthcare-related expenditures for a typical American are more than $17,000 annually. This includes the insurance premiums the individual (and their employer) pays as well as co-payments, deductibles and the taxes that fund Medicare, Medicaid and other public programs.

CNN reported last month that employers are preparing for the steepest increase in health benefit costs in 15 years in light of the sharp rise in doctor visits, emergency room usage and claims for mental health services in recent years. Employers say that prescription drug costs in particular are straining budgets. This includes treatments for advanced cancer, autoimmune conditions, diabetes and weight loss.

As Elisabeth Rosenthal of KFF Health News points out, while this year’s increases will be large, premiums in the health insurance market have risen enormously in the past 25 years. Family health insurance premiums have surged 297% since 2000. Workers in 2025 paid nearly four times more for the same coverage in employer-based plans as in 2000, far exceeding the inflation rate.

High-deductible health plans have also become more common, with 32% of employees facing deductibles of $2,000 or more. And deductibles for employer-based plans have risen nearly 50% since 2015. This is money insured enrollees must spend out-of-pocket before insurance kicks in. The Commonwealth Fund calculated in 2023 that the average annual deductible for an employee of a large firm was $3,547. For an employee of a small firm, it was $5,074. The situation in parts of the ACA marketplace has become worse over time. An average deductible for a standard ACA silver plan in 2025 is nearly $5,000, approximately twice what it was a decade ago.

Premium increases are forecast to also impact Medicare beneficiaries. The base average monthly premium for the outpatient drug benefit called Part D is projected to increase by 6% in 2026 to about $39, which is the maximum allowable increase under one the Inflation Reduction Act’s provisions. And Medicare Part B premiums are expected to be over $200 a month in 2026, which represents a 12.6% increase. Part B covers outpatient services, including physician-administered drugs.

What’s compounding the problem for many Americans is that they have grown accustomed to paying more for less. This decades-long trend has seen health insurers placing more restrictions on hospital, physician and pharmacy networks as well as prescription drug coverage, while raising premiums, deductibles and out-of-pocket cost sharing.

Anecdotally, when I became self-employed in 2017 and entered the individual non-group market for health insurance, the monthly premium for my “bronze” plan was $286 a month. Now, the same plan costs $637 in 2025. Starting in Jan. 2026, my monthly premium will be $740, a 16% increase.

I’m lucky to be in comparatively good health and to hardly ever make use of the healthcare system. Accordingly, the choice among the options available to me is straightforward: The least expensive. I don’t qualify for any subsidies. And while as a self-employed person I get a tax deduction for the premiums I pay, that hardly offsets the considerable costs I incur just to be insured. If I access the healthcare system, my fee to have coverage doesn’t entitle me to free at point-of-service healthcare of any kind, except for vaccines and an annual physical (though even then I incur an out-of-pocket charge of $150 for the bloodwork). My ever-increasing deductible will be $2,900 in 2026, which means I’d have to spend that amount before any actual insurance coverage kicks in. And even then, I’d be nickel-and-dimed with co-payments ranging from $50 to more than $1,000 for physician visits, diagnostic work-up and hospitalizations. I could have opted for plans with lower out-of-pocket costs (that is, better coverage), but the premiums would then be at least twice as much.

Taking a bird’s eye view of the high cost of health insurance and healthcare in America, it’s no wonder that a Gallup Poll released earlier this year found that nearly 91 million adults say they wouldn’t be able to afford needed medical care.

Forbes