Brace for Impact 🚀 Why Health Insurance Premiums Could Skyrocket in 2026.

Millions of Americans may be facing the steepest health-insurance cost hike in over a decade... and it all hinges on congressional action.

What’s About to Expire

The key driver here is the set of enhanced federal subsidies for health plans offered under the Affordable Care Act (ACA) marketplaces. These subsidies were introduced during the pandemic via the American Rescue Plan Act (ARP) in 2021, and later extended through 2025 by the Inflation Reduction Act (IRA) in 2022.

Here’s what the enhanced subsidies did:

• Removed the “subsidy cliff.” Before 2021, anyone earning more than 400% of the federal poverty level (FPL) lost all subsidy eligibility — even if their insurance premiums consumed a significant chunk of their income.

• Capped costs as a share of income. The enhancements reduced what enrollees had to pay toward a benchmark Silver plan from roughly 2%–9.5% of income to a lower range of 0%–8.5%.

• Expanded eligibility and affordability. These measures opened ACA coverage to millions of middle-income Americans who previously couldn’t afford unsubsidized premiums.

But here’s the catch: these changes were temporary. Unless Congress acts before December 31, 2025, the enhancements will expire on January 1, 2026. That would reinstate the original 400% FPL cap and less generous subsidy levels, instantly increasing costs for millions.

Who’s at Risk

Under the current rules (with the enhanced subsidies in place):

• Individuals earning up to around $63,000/year can qualify for assistance.

• Families of four qualify with income up to about $130,000.

Above those thresholds, the help disappears — and so does affordability. Insurance expert Steve Marsh explained it bluntly on our local Monday night show on Newstalk KBOI:

“Starting January, you will not be eligible for a tax credit if your income is over about $63,000 as an individual. You’ll be looking at paying full retail price.”

That could mean:

• $800–$1,000 more per month for unsubsidized plans

• $11,000 per year more for a family of four earning $130,000

• $7,000–$8,000 per year lost in tax credits for individuals just over the income cutoff

In short: even households solidly in the middle class could see premiums double overnight if the enhanced subsidies lapse.

How Much More Will You Pay?

The Kaiser Family Foundation (KFF) reports that the average annual premium for family coverage through employer plans reached nearly $27,000 in 2025, a 6% rise from the year before. But ACA marketplace enrollees could see a much steeper jump if subsidies expire.

KFF’s modeling suggests that:

• The average ACA premium payment (after tax credits) could rise by 114% in 2026.

• Nationally, that means premiums could increase from around $888/month to nearly $1,900/month for many households.

The shock would be felt most by middle-income earners and early retirees—those who don’t qualify for Medicaid but aren’t yet eligible for Medicare.

The Medicare Advantage Shake-Up

2026 will also bring major changes to Medicare Advantage.

Here’s what’s happening:

• Zero-premium Advantage plans are disappearing in many regions.

• Many insurers are introducing monthly premiums under $60 instead.

• In Idaho alone (our home state), about 80,000 residents will lose current Advantage coverage as carriers like Blue Cross’s True Blue, Regence, and UnitedHealthcare restructure or exit markets.

Those who don’t actively re-enroll could be automatically placed back into Original Medicare — which includes higher deductibles and fewer protections unless they act before December 31, 2025.

However, there’s a silver lining: some individuals will qualify for a special “guaranteed issue” period to switch to Medigap Plan G, a supplement plan offering lower deductibles and broader provider access.

Why Costs Keep Rising

Even if subsidies remain, the cost of health care itself continues to climb — and that drives premiums higher across all coverage types.

Here’s what’s behind it:

• Hospital and physician costs have risen steadily as labor, equipment, and facility expenses surge.

• Prescription drugs are a growing cost driver, particularly newer GLP-1 treatments such as Ozempic and Wegovy, which cost thousands per month.

• Broader utilization - More Americans seeking preventive and chronic-care services, which also pushes insurer payouts up.

• Insurer uncertainty about whether subsidies will continue has already led to “risk-loading,” where carriers build larger premium increases into 2026 filings to hedge their exposure.

In other words, the underlying cost of health care is the engine — subsidies are the shock absorbers. Remove the shock absorbers, and consumers feel the full force.

A Brief History: How We Got Here

The Affordable Care Act (ACA), passed in 2010, restructured individual insurance markets by:

• Creating online exchanges (“marketplaces”) for private coverage.

• Requiring insurers to accept people with pre-existing conditions.

• Offering premium tax credits for those earning between 100%–400% of the federal poverty level.

That final piece — the 400% cap — meant that if you earned even a dollar over the threshold, you lost all subsidy eligibility. It was known as the “subsidy cliff.”

During the pandemic, the American Rescue Plan Act of 2021 temporarily eliminated that cliff and made coverage much cheaper by capping costs as a share of income. The Inflation Reduction Act later extended those enhancements through 2025.

Now, unless Congress intervenes, the law reverts to its original form in 2026.

That’s why this isn’t a new policy fight — it’s the expiration of a temporary affordability fix that’s been cushioning millions of Americans from steep costs.

What You Can Do Now

1. Review Your 2026 Income Estimate

Open enrollment for 2026 marketplace plans runs November 1–December 15. Your subsidy eligibility depends on your projected Modified Adjusted Gross Income (MAGI). Even small miscalculations — bonuses, IRA withdrawals, or investment income — can affect whether you qualify for credits or owe money back.

2. Use Tax-Advantaged Tools to Manage MAGI

If you’re close to the income threshold:

• Contribute to pre-tax accounts like 401(k)s or traditional IRAs.

• Fund a Health Savings Account (HSA) — now available for more Bronze-level plans.

• If you’re self-employed, be strategic with deductions and business income timing.

• Consider deferring income or spreading out Roth conversions over multiple years.

These steps can help keep your MAGI below the subsidy cutoff — potentially saving thousands in premiums.

3. Get Help from a Licensed Agent

Health-insurance agents cost nothing to use and can walk you through plan comparisons, carrier changes, and income projections.

As Marsh noted during the same show:

“Agents don’t cost you anything — we’re paid by the insurance company. There’s no reason not to use one.”

4. Contact Your Lawmakers

If you or your clients would be affected by the expiration, make your voice heard. Congressional offices track constituent feedback, and widespread voter concern could determine whether subsidies get renewed.

Final Thought

If Congress doesn’t act, middle-income families and early retirees could see premiums double in 2026 — not because their coverage changed, but because the federal assistance keeping it affordable disappeared.

The best move right now is to plan ahead: review your income, maximize your tax-advantaged savings, evaluate your plan options, and stay engaged. Because when it comes to health insurance, doing nothing might be the most expensive choice of all.

Sources & References

• Kaiser Family Foundation (KFF) — ACA Marketplace Premium Payments Would More than Double on Average Next Year if Enhanced Premium Tax Credits Expire (Sept 2025).

• KFF Interactive Brief — How Much More Would People Pay in Premiums if the ACA’s Enhanced Subsidies Expired?

• Congressional Research Service — CRS Report R48290: Premium Tax Credit Changes & Expiration Dates.

• Health System Tracker — How Much and Why ACA Marketplace Premiums Are Going Up in 2026.

• Commonwealth Fund — Expanded Federal Premium Tax Credits & State Affordability Programs.

• PBS NewsHour Interview — Amna Nawaz with Cynthia Cox, Oct 2025.

• The Real Money Pros: The Money Hour — Interview with Steve Marsh, KBOI Radio (Oct 27, 2025).

• Centers for Medicare & Medicaid Services (CMS) — Medicare Advantage 2026 Plan Landscape Preview (Oct 2025).

• Image Credits: All images created using Canva and Canva Magic Media.

Disclosure

Apollon Wealth Management, LLC dba Tree City of Apollon (Apollon) is an investment advisor registered with the SEC. This document is intended for the exclusive use of clients or prospective clients of Apollon. Any dissemination or distribution is strictly prohibited. Information provided herein is for informational and/or educational purposes only and is not to be considered investment advice nor a recommendation of any investment product or service. Advice may only be provided after entering into an engagement agreement and providing Apollon with all requested background and account information. When making any tax or legal decisions, clients should consult specific professionals such as legal counsel or a CPA. This piece is for information only and is not tax advice. While every effort has been made to ensure accuracy, only the IRS tax code itself should be considered official. Apollon does not file taxes for any clients. Please visit apollonwealthmanagement.com for other important disclosures.