Employer-sponsored health insurance premiums keep climbing as ACA subsidy support wanes

The Buzz This Week

The cost of employer-sponsored health insurance is on the rise, with premiums up 6% over last year, according to a new report. The average annual family premium is $26,993, and workers pay $6,850 on average (approximately 25% of the total). Individual annual coverage averages $9,325, with workers paying $1,440 on average (approximately 16% of total). It is the third straight year of increases at or above 6%, and family premiums have grown about 25% over 5 years.

Nearly one-third of covered workers are in high-deductible plans (up six points from last year). The average deductible for individual coverage is now $1,886 (up 17% since 2020). Deductibles are significantly higher at smaller employers.

Large employers cite prescription drug prices, adoption of new therapies, chronic disease prevalence, higher utilization, and hospital prices as key contributors to recent premium growth. In response, many have shifted toward consumer-driven health plans that increase cost sharing.

Within the Affordable Care Act (ACA) marketplace, uncertainty persists as the enhanced premium tax credits are set to expire at year’s end unless extended. The expiration would raise net premiums for subsidized enrollees, shrink risk pools, and increase churn in 2026. Finalized rates indicate about a 30% average premium increase for 2026 in federally run marketplaces. Enrollees who receive subsidies would face an even larger increase of more than 100% if the enhanced premium tax credits expire as scheduled.

Together, higher employer premiums, larger deductibles, and rising marketplace rates point to a tighter affordability environment in 2026, shaping how people enroll and where they seek care.

Why It Matters

Costs drive how consumers seek care. Recent national polling indicates that about 72.2 million adults did not seek needed care in the prior 3 months because of cost. A 2025 study in JAMA found that adults enrolled in high-deductible plans were less likely to receive guideline-recommended care across visits, labs, and medications than those in non-high-deductible plans. The high investments in premiums alone may cause many households to forgo or delay routine and preventive care.

Health systems are already seeing the downstream effects of delayed care and coverage churn. Recent reports show charity care and bad debt increased roughly 5% to 9% compared with the same period last year and about 17% to 21% compared with 2023. Meanwhile, expenses continue to climb faster than revenue, tightening margins. Visit complexity is also rising: the share of high-complexity emergency department (ED) visits increased from about 37% in 2018 to 48% in 2024, raising cost per encounter and exacerbating wait times.

As some workers forgo coverage altogether, they are more likely to re-enter the system through higher-acuity sites, including EDs. This will compound the bad debt and charity trends health systems are already reporting.

Amid these pressures, health systems and health plans must find ways to support access and continuity of care for their communities. This may include expanding value-based arrangements that support advanced primary care, timely follow-up, and total cost performance.

Providers will need to be prepared to maintain financial assistance and front-end access to support patients amid coverage churn. Health systems can consider the following to help address consumers’ needs:

Embed marketplace and Medicaid enrollment assistance at registration
Automate redetermination reminders
Deploy coverage navigation and real-time eligibility checks at registration
Use presumptive charity screening when appropriate
Adjust pharmacy and infusion site-of-care protocols to maintain continuity of medications during coverage gaps

On the health plan side, consumer-driven plan designs are here to stay. The most effective ones will likely include savings options, tiered networks, and centers of excellence programs. They will also remove first-dollar friction for high-value primary and preventive services, add simple navigation to guide members to in-network primary care and virtual options, and manage specialty pharmacy access.

Additionally, as consumers and employers respond to cost pressures, providers will need to demonstrate their ability to deliver high-quality, cost-effective care. This can encourage ongoing engagement with the health system and access of care at the right time and in the right setting. Making price and performance data available can also make the health system a provider of choice.

In the wake of policy changes and a shifting coverage landscape, health systems and health plans will need to take steps to help keep care in the most appropriate setting, reduce uncompensated care risk as subsidies wane, and support coverage and access as employer premiums rise.