Health insurance premiums are set to spike in 2026—driven by rising medical costs, pricey drugs, and the expiration of ACA subsidies.
Whether your health insurance coverage is part of the Affordable Care Act (ACA) or not, you can expect a hefty premium increase in 2026. For example, insurers in New York are filing premium rate increases that range from a modest 0.9 percent to a hefty 66.4 percent, according to insurance services firm Certifi.
Why do insurance premiums continue to increase? Will this force healthy individuals to forgo insurance and take their chances?
Rising Cost of Health Care
Medical inflation contributes to the increase in health insurance costs. According to the Peterson-KFF Health System Tracker, the price of medical care has increased by 121.3 percent since 2000. This includes services, drugs, and medical equipment.
Factors that contribute to these costs include an aging population (which contributes to increased use), technological advances, administrative costs, profit margins, and specialty medications.
According to the Health System Tracker, overall health costs typically outpace growth in the rest of the economy.
Aging Population Contributes to Higher Premiums
In 2023, there were 56 million Americans over 65, according to the Administration for Community Living. This number is projected to swell to 94.7 million by 2060. According to the National Institute on Aging, 60 percent of these older adults have two or more chronic conditions. This adds to the strain on and cost of health care.
Technological Advances Save Lives but Not Money
Better procedures that come from advanced health care technology may be better, but they also cost more. And over time, these latest technologies account for 38–62 percent of the increase in health care insurance costs.
GLP-1s and Specialty Medications
There’s a growing demand for specialty medications, such as Ozempic and Wegovy. This contributes to increased prescription drug spending. For example, the standard list price for Ozempic is $997.58 per month, according to Novocare, the company that owns the patent on it.
Novocare also owns Wegovy, which has a list price of $1,349.02 per month. Both GLP-1 drugs are used for diabetes treatment and weight loss.
Insurers expect script mix to increase by 7 percent in 2026.
In response to these costs, insurers are either increasing premiums or are beginning to remove coverage for GLP-1s for weight-loss purposes, resulting in a decrease in premiums.
By Anne Johnson
