KANSAS CITY (AP) — Health insurance is under pressure, and costs are likely to rise significantly in 2026. Insurers are warning that patients might face higher out-of-pocket expenses for doctor visits and changes in prescription coverage.
Many individual coverage marketplaces could see steep price hikes. Insurers are bracing for an end to federal support, which helped people afford coverage. Larry Levitt, vice president at KFF, highlights the uncertainty in every health insurance market. This kind of instability hasn’t been seen for years.
What’s Behind the Price Increases
Insurers have been reporting increased costs due to more people seeking care. Emergency room visits are up, and claims for mental health treatment are also rising. Interestingly, some healthier individuals are opting out of individual markets, leaving fewer healthy people to balance the risk.
Enrollment in Affordable Care Act marketplaces saw significant growth during the pandemic. However, stricter eligibility checks now make it harder for some to maintain coverage, according to Jefferies analyst David Windley.
Prescription drugs are another major issue. Treatments for diabetes and obesity, known as GLP-1 drugs—like Ozempic and Wegovy—are particularly costly and challenging for insurers. Vinnie Daboul from RT Consulting notes that managing these pharmacy costs can be a huge headache.
Rising Costs of New Treatments
Gene therapies, which can exceed $2 million for a single treatment, are adding to the financial strain. Last year, Sun Life Financial managed 47 claims over $3 million—an increase from virtually none a decade ago. This rise in high-cost treatments is becoming more common, further driving up insurance premiums.
Marketplace Challenges Ahead
Insurance costs in the Affordable Care Act’s individual marketplaces are expected to rise by about 20% in 2026, as per KFF analysis. If federal tax credits lapse, consumers could see their costs skyrocket by 75% or more.
Shirley Modlin, a business owner in Virginia, worries about these rising prices. She provides her employees with a monthly reimbursement for health coverage, but it barely scratches the surface of what they pay, leading to concerns about employee retention.
Shifting Costs to Employees
The trend isn’t just affecting individuals; larger employers are also feeling the impact. According to Mercer, many employers plan to shift more healthcare costs onto employees, possibly through higher deductibles or increased out-of-pocket maximums.
Prescription coverage may change as well. Patients might face more limits on costly obesity treatments or changes in how deductibles are structured. Emily Bremer from The Bremer Group notes that while dramatic shifts may not happen immediately, sustained pressure on pharmacy costs could lead to quicker changes.
In sum, the landscape of health insurance is shifting, and both individuals and employers need to brace for the possibility of rising costs and changing coverage options. It’s a complex situation that’s evolving, and understanding these changes is crucial for everyone.
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