Written by Michael LaPick
Healthcare Writer
Reviewed by Colleen McGuire
Healthcare Compliance Writer
We want to help you make educated healthcare decisions. While this post may have links to lead generation forms, this won’t influence our writing. We adhere to strict editorial standards to provide the most accurate and unbiased information.
Key Takeaways
- ACA subsidies lower monthly premiums, but changes to eligibility or amounts in 2026 could make coverage unaffordable for many middle-income families.
- Rising medical inflation, insurer adjustments, and ending enhanced subsidies all drive premium increases.
- You can take steps to reduce costs — from updating your Marketplace application to comparing new plan options.
- Staying proactive before open enrollment can prevent sticker shock next year.
Overview: Why Are ACA Premiums Rising So Much?
If you opened your Marketplace renewal notice this year and gasped, you’re not alone. Many Americans are asking the same question: “Why did my health insurance premium go up?”
In 2025, ACA (Affordable Care Act) premiums are expected to climb in nearly every state, driven by rising healthcare costs, market shifts, and potential changes to federal subsidies. While each person’s increase looks different, understanding why it happened — and what to do next — can help you take control of your health insurance costs.
For a detailed overview of what’s changing in the ACA Marketplace next year, see our 2026 Guide to ACA Marketplace Plans.
1. ACA Subsidy Changes: The Biggest Factor Behind Rising Costs
ACA subsidies, also known as premium tax credits, help lower monthly insurance payments for individuals and families who buy coverage through the Marketplace.
How They Work
Subsidies are based on your:
- Household income
- Family size
- Local benchmark plan (the second-lowest-cost Silver plan)
When your income changes, or when Congress adjusts the subsidy rules, your financial help may shrink or disappear altogether.
Tip: If you want to see how much your premium tax credit might be, try our ACA Subsidy Calculator to estimate your potential savings.
Subsidy Eligibility During the Fall Open Enrollment Period for 2026 Coverage
Temporary enhanced subsidies—originally expanded under the American Rescue Plan and later extended through 2025—are set to expire in 2026, unless Congress votes to renew them.
If those enhancements end, the standard ACA rules would once again apply. Under current law, most individuals and families earning between 100% and 400% of the Federal Poverty Level (FPL) will still qualify for premium tax credits to help lower the monthly cost of Marketplace coverage.
However, without the enhanced provisions, some middle-income households could see their financial assistance reduced or eliminated, depending on their income and location.
Losing ACA Subsidies Can Be Costly
Losing or reducing your ACA subsidy can dramatically increase your out-of-pocket burden — sometimes doubling what you pay each month.
What Happens When Subsidies Shrink
| Scenario | Average Monthly Premium (After Subsidy) | Average Monthly Premium (If Enhanced Subsidies Expire) | Estimated % Increase |
| Single Adult (Age 40, 250% FPL) | $163 | $350 | +115% |
| Family of Four (Age 40 adults, 250% FPL) | $408 | $876 | +114% |
Without enhanced subsidies, the typical Marketplace enrollee would pay more than twice as much in premiums next year. Middle-income families could see their health-insurance bills jump hundreds of dollars monthly, while some might lose eligibility for tax credits entirely.
As you prepare for the next open-enrollment period, review your eligibility early and explore new plan options. You can stay up-to-date on upcoming changes in our 2026 ACA Open Enrollment Guide.
2. Medical Inflation Is Driving Higher Premiums
Healthcare costs are rising faster than overall inflation — largely due to:
- Higher prices for hospital services and prescription drugs
- Increased labor costs for healthcare providers
- A surge in elective care after pandemic-era delays
According to KFF, Insurers adjust premiums annually to cover projected expenses. If your plan’s network includes hospitals or providers that raised prices, your premiums likely increased as a result.
Even if your personal health didn’t change, the cost of care delivery affects everyone’s premiums. To learn how insurers manage these price shifts and member benefits, explore our guide to the Best Health Insurance Companies.
3. Insurer Risk Adjustments and Market Shifts
Marketplace insurers must share costs for high-risk enrollees under the ACA’s risk adjustment system. When more sick or older members enter the pool, plans raise premiums to stay solvent.
Additional pressures include:
- Fewer younger enrollees joining the pool
- Regional exits by smaller insurers (reducing competition)
- Expanding mental health and preventive care mandates
These changes push average premiums up, even for people who didn’t switch plans.
If you’re exploring other coverage models or supplemental plans, check our breakdown of Marketplace healthcare alternatives.
4. Plan Changes and Benefit Design Adjustments
Your insurer may have:
- Reclassified your plan into a higher metal tier
- Narrowed the provider network
- Changed prescription coverage (formulary)
If your 2025 plan added new benefits or expanded its network, premiums likely rose to reflect those improvements.
Before choosing a new plan, make sure you understand the fundamentals. Our resource, 6 Essentials to Understand Before Choosing an ACA Plan, explains how deductibles, out-of-pocket maximums, and networks can make or break your budget.
Tip: Compare your 2024 and 2025 plan summaries carefully. You might find a similar Silver or Bronze plan in your area with lower premiums or better subsidies.
5. Provider Price Increases and Cost-Shifting Ripple Through Premiums
Hospitals and provider networks continue to raise prices to offset labor shortages, inflation, and lower reimbursements from public programs. Insurers then pass those higher claims costs to consumers through Marketplace premiums.
According to KFF’s analysis of preliminary 2026 rate filings, insurers specifically cite rising prices for hospital and physician services as a primary driver of higher premiums:
FAQ: Understanding ACA Premium Increases
Q: Why is my ACA plan so expensive this year?
A: The main culprits are subsidy adjustments, medical inflation, and insurer network changes. When government support decreases or medical costs rise, premiums follow.
Q: Will ACA premiums go down in 2026?
A: It depends on whether Congress renews enhanced subsidies and how insurers price risk. Some states may also step in with local assistance programs.
Q: How can I estimate my new subsidy for 2026?
A: Use our ACA Subsidy Calculator to project your premium tax credits based on your income and family size.
Q: What if I can’t afford Marketplace coverage anymore?
A: Consider reviewing Marketplace healthcare alternatives like short-term or fixed-indemnity plans. Just remember, these options don’t include all ACA protections.
Q: When should I start comparing new plans?
A: During open enrollment (typically November–January). Our 2026 ACA Open Enrollment Guide covers the latest deadlines and savings strategies.
Bottom Line: Don’t Let ACA Premium Spikes Catch You Off Guard
Premium increases can feel frustrating, but they often reflect larger market trends — not just your plan. The good news? With the right strategy, you can offset rising costs and still get reliable coverage.
Before 2026, review your subsidies, explore plan alternatives, and stay informed about policy changes that could impact your wallet. Your best defense against a premium shock is proactive planning and understanding how ACA subsidies really work.
A friendly team of licensed insurance agents is here to guide you.
Thank you for your feedback!
