If opening your January health insurance bill feels like getting punched in the wallet, you're not alone. Americans enrolled in Affordable Care Act marketplace plans are facing the largest premium increases in the program's history, with costs rising an average of 26% in 2026—more than eight times the rate of general inflation.

The surge affects roughly 20 million people who purchase insurance through the ACA exchanges, and for many, the pain will be even worse than that average suggests. Some enrollees are seeing their monthly premiums more than double, particularly those who no longer qualify for enhanced subsidies that have propped up the marketplace since 2021.

The Perfect Storm Behind the Surge

This isn't a single-cause crisis. Instead, it's a convergence of policy changes, medical cost inflation, and pharmaceutical market forces that have combined to create what health economists are calling a "perfect storm" of premium pressure.

The single biggest factor is the expiration of enhanced premium tax credits that were enacted in the American Rescue Plan Act of 2021 and extended by the Inflation Reduction Act. These credits, which expire at the end of 2025, helped millions of Americans afford coverage by capping premium costs at a percentage of household income.

Without those enhanced credits, the Kaiser Family Foundation estimates that currently subsidized enrollees will see their monthly premium payments more than double—an average increase of 114%. For individuals earning between $23,000 and $31,000 annually, the hit is even more severe: a 400% increase in out-of-pocket spending on premiums.

The GLP-1 Effect

Beyond policy changes, medical cost inflation is playing a substantial role. And one category of medications deserves special attention: GLP-1 drugs like Ozempic, Wegovy, and Zepbound.

These diabetes and weight-loss medications have become blockbusters, with millions of Americans now taking them. But their high prices—often exceeding $1,000 per month without insurance—are flowing directly into premium calculations.

"Insurers explicitly cited GLP-1 medications as a key driver of 2026 premium increases," noted a recent analysis from the Peterson-KFF Health System Tracker. The drugs' popularity has forced actuaries to build substantial cost increases into their projections, and those costs get passed along to all enrollees.

Other high-cost specialty drugs, including biologics and emerging gene therapies, are compounding the pressure. These treatments, while often life-changing for patients who need them, come with price tags that can reach hundreds of thousands of dollars annually.

Employer Plans Aren't Immune

The ACA marketplace isn't the only place Americans are feeling the pinch. Workers with employer-sponsored insurance—roughly 164 million people—are projected to see their costs rise 6% to 7% in 2026, more than double the current rate of inflation.

According to Mercer, the consulting firm, the average annual family premium for employer-sponsored coverage could increase by $617 in 2026, bringing the employee share to approximately $7,467 annually. That's on top of deductibles, copays, and other out-of-pocket costs that have been rising steadily for years.

Medicare Changes Add to the Burden

Seniors aren't escaping the cost crunch either. The standard Medicare Part B premium has climbed to $202.90 per month—the first time it has ever exceeded $200. That 9.7% increase is the second-highest in the program's history.

Meanwhile, three of the largest Medicare Advantage providers are pulling back coverage in 2026, forcing an estimated 1.2 million beneficiaries to find new plans or return to traditional Medicare.

What Can You Do?

Despite the grim headline numbers, health policy experts say there are steps consumers can take to minimize the damage:

  • Shop aggressively during open enrollment. Premium increases vary widely by plan and region. The plan that was cheapest last year may not be the best deal in 2026.
  • Check your subsidy eligibility. Even without enhanced credits, many Americans still qualify for substantial assistance. Income changes could affect your eligibility in either direction.
  • Consider high-deductible plans with HSAs. For relatively healthy individuals, these plans can offer lower premiums while providing tax-advantaged savings for future medical expenses.
  • Review your prescription coverage carefully. Drug formularies change annually, and a plan that covers your medications at a lower tier could save hundreds or thousands of dollars.

The Policy Fight Ahead

The premium spike is already becoming a political flashpoint. Advocates for extending the enhanced subsidies argue that allowing them to expire will cause millions to lose coverage entirely—estimates suggest between 3 and 4 million people could become uninsured in 2026 without congressional action.

Opponents counter that the enhanced credits were always intended to be temporary pandemic relief and that extending them would add hundreds of billions to the federal deficit over the coming decade.

For the millions of Americans signing up for coverage this month, the policy debate is academic. The bills are due now, and they're significantly higher than they were last year. As healthcare costs continue their relentless climb, the question of how to make insurance affordable remains one of America's most pressing—and divisive—economic challenges.