If you're shopping for health insurance or renewing your coverage for 2026, brace yourself: this year brings some of the steepest cost increases we've seen in over a decade. Whether you get coverage through your employer, buy it on the ACA marketplace, or rely on Medicare, you're likely looking at higher premiums, bigger deductibles, and more money coming out of your pocket. Here's what's happening, why it's happening, and most importantly, how you can plan for it.
The Big Picture: Why Are Costs Jumping So Much?
Health insurance costs are rising across the board in 2026, but the increases aren't hitting everyone equally. For people buying coverage on the ACA marketplace, the median premium increase is 18%—more than double what insurers raised rates in 2025. Some states are seeing even more dramatic spikes, with Illinois residents facing an average 78% increase.
If you get insurance through work, you're not off the hook either. Employer-sponsored premiums are expected to rise 6.5-9.5% in 2026, marking the highest increase since 2010. The average family premium now costs employers and workers a combined $26,993 per year, with workers typically contributing about $6,850 of that amount.
So what's driving these increases? Three main factors are at play. First, prescription drug costs are skyrocketing, particularly for specialty medications and the wildly popular GLP-1 drugs like Ozempic and Wegovy. Second, overall medical costs continue trending upward at 7-8% annually as healthcare services become more expensive. Third, and perhaps most impactful for marketplace shoppers, enhanced premium tax credits are set to expire at the end of 2025 unless Congress extends them. These subsidies have helped more than 20 million people afford coverage, and their disappearance would leave many facing the full cost of insurance.
What to Expect: Premiums, Deductibles, and Out-of-Pocket Maximums
Let's break down what you'll actually be paying in 2026. Your premium is just the starting point—the amount you pay each month to have coverage. But when you actually use your insurance, you'll encounter deductibles and out-of-pocket maximums that determine how much you pay before your insurance kicks in fully.
For ACA marketplace plans, the out-of-pocket maximum—the absolute most you can be required to pay for covered services in a year—has increased to $10,600 for individual coverage and $21,200 for family coverage. This is a 4.4% increase from 2025. If you have a high-deductible health plan paired with a Health Savings Account, your maximum out-of-pocket costs can reach $8,500 for individual coverage and $17,000 for family coverage.
Deductibles are also climbing. Workers with employer-sponsored coverage face an average deductible of $1,886, though this varies significantly by company size. If you work for a small firm, your average deductible might be $2,631, compared to $1,670 at larger companies that can negotiate better terms with insurers.
Here's what this means in real terms: if you have a $2,000 deductible and a $10,600 out-of-pocket maximum, you'll pay the full cost of most healthcare services until you've spent $2,000. After that, you'll typically pay coinsurance (say, 20% of costs) until your total spending hits $10,600, at which point your insurance covers everything else for the rest of the year.
How Employers Are Responding (And What It Means for You)
Facing their own cost pressures, employers are making changes that shift more financial responsibility to workers. About 59% of employers plan to make cost-cutting changes to their health plans in 2026, up from 48% in 2025. These changes typically mean higher deductibles, increased copays, and larger premium contributions from employees.
The trend toward cost-sharing isn't new, but it's accelerating. Workers now contribute an average of 16% of the premium for single coverage and 26% for family coverage. While those percentages have remained relatively stable, the actual dollar amounts keep growing as overall premiums rise. That $6,850 average annual contribution for family coverage represents a significant chunk of most household budgets.
If you're on Medicare, you're not immune either. Part B premiums are jumping nearly 12% to $206.50 per month in 2026. Medicare Advantage out-of-pocket maximums will decrease slightly to $9,250, offering some relief, but Part D prescription drug deductibles are rising to $615.
Strategies to Manage Your 2026 Health Insurance Costs
The cost increases are real, but you're not powerless. Here's how to approach your health insurance decisions for 2026 strategically.
First, don't automatically renew your current plan without shopping around. If you buy coverage on the marketplace, compare all available options during open enrollment. A plan that was competitive last year might not be your best choice this year given the varying rate increases across insurers. Pay attention to total costs, not just premiums—a plan with a lower monthly payment might cost you more overall if it has a much higher deductible or out-of-pocket maximum.
Second, if your employer offers a high-deductible health plan with a Health Savings Account, run the numbers carefully. HSAs offer triple tax advantages: contributions are tax-deductible, growth is tax-free, and withdrawals for qualified medical expenses aren't taxed. For 2026, you can contribute up to $4,300 for individual coverage or $8,550 for family coverage. If you're generally healthy and can afford to save, an HDHP with an HSA can be a smart financial move.
Third, take advantage of preventive care. All ACA-compliant plans must cover certain preventive services at no cost to you, even if you haven't met your deductible. This includes annual checkups, screenings, and vaccinations. Using these services can help catch health issues early when they're less expensive to treat.
Fourth, if you're buying marketplace coverage, check your subsidy eligibility carefully. Even with the potential expiration of enhanced tax credits, you might still qualify for assistance based on your income. Premium tax credits are available to people earning between 100% and 400% of the federal poverty level, and the amount of help you get depends on your specific situation.
What Happens Next: Planning for an Uncertain Future
The 2026 cost increases are significant, but they're also happening against a backdrop of uncertainty. Congress could still extend the enhanced premium tax credits, which would provide relief for marketplace shoppers. New regulations or policy changes could affect how insurers price their plans. And ongoing efforts to control prescription drug costs might eventually slow the rate of increase.
What's clear is that healthcare costs aren't going to suddenly reverse course. Building health insurance costs into your budget as a significant, growing expense is just smart planning. Set aside time during open enrollment to thoroughly review your options, understand what you're paying for, and choose coverage that makes sense for your health needs and financial situation.
The good news? You have more tools and information available than ever before to make informed decisions. Take advantage of them, ask questions, and don't be afraid to get help from a licensed insurance agent who can explain your options in plain language. Your future self—and your wallet—will thank you.
