Health insurance is poised to get pricier in 2026 and coverage could narrow, as higher medical use and expensive drugs ripple through the market, industry analysts say.
Usage Surge, Pricey Drugs Drive Insurer Uncertainty Into 2026
"We're in a period of uncertainty in every health insurance market right now, which is something we haven't seen in a very long time," said Larry Levitt of KFF in a statement provided to the Associated Press. Insurers cite more ER visits, rising mental-health claims and a surge in high-cost prescriptions, including GLP-1 medicines for diabetes and obesity.
Pressure is acute in the Affordable Care Act marketplaces, where filings point to roughly 20% premium hikes next year, KFF's reviews show. If enhanced ACA tax credits lapse at the end of 2025, average out-of-pocket premiums could jump more than 75%, magnifying the hit for many households.
Healthier People Are Dropping Individual Cover Plans
Insurers also report that healthier customers are dropping individual coverage as verification rules tighten, leaving a sicker risk pool. "People who use little care ‘are disappearing,'" said Jefferies analyst David Windley. Pharmacy costs are a particular sore spot. "Pharmacy just gives me a headache, no pun intended," said Vinnie Daboul of RT Consulting.
Gene Therapies And Employer Cost-Shifting Heighten Pressure
Ultra-expensive therapies are adding to the strain. Brokers note more gene therapies with one-time price tags above $2 million, while stop-loss carrier Sun Life said it covered 47 claims topping $3 million last year, a level seldom seen a decade ago. An analysis from April 2024 warns that the growing pipeline of gene therapies will keep financial pressure elevated even as treated patient numbers remain small.
Employers, who cover most Americans, are bracing too. A survey from Mercer indicates that about half of large employers are likely to shift more costs to workers in 2026, for example, by raising deductibles, adjusting out-of-pocket maximums, or tightening coverage rules for pricey drugs like GLP-1s. Some companies are also weighing separate pharmacy deductibles or eligibility limits.
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