High hospital and provider prices are top driver of health insurance rates

Across the country, people are experiencing sticker shock when they open their annual insurance rate notices and discover their 2026 premium increases. People with employer-sponsored health coverage and those who buy a plan in the individual or small-group insurance market are getting hit especially hard, at a time when working families are already struggling under the burden of high costs for health care, groceries and other basic necessities.

On average, health insurance rates will be 26% higher in the individual insurance markets than last year.

Why are health insurance premiums spiking? Decades of data show prices for hospital services and prescription drugs continue to be the leading drivers of high and rising health insurance premiums for both people who get coverage through their employers and people who purchase insurance in the Affordable Care Act marketplaces. The majority of 2026 rate filings directly connect higher insurance rates to these high and rising costs.

To make matters worse, insurers are also raising premiums to account for the looming expiration of enhanced premium tax credits, which would force millions of people to drop their coverage.

Families USA reviewed insurers’ 2026 rate filings to understand the key drivers of high and rising health insurance premiums for people seeking to enroll in the ACA’s individual and small-group health insurance coverage for plan year 2026.

Families USA called on Congress to protect our nation’s families and businesses by lowering health care costs. Specifically, Congress should take immediate action to:
• Extend the enhanced premium tax credits to avoid a “premium cliff” for millions of working
families.
• Hold corporate health systems accountable for charging excessive health care prices by:
○ Stopping corporate health systems from charging Medicare more for the same procedures
if performed at a hospital facility instead of a doctor’s office.
○ Requiring all hospitals and health plans to disclose the prices they charge in dollars and
cents in a clear format.
○ Closing legal loopholes that allow drug companies to raise prices by ending patent
abuses.
○ Restricting predatory billing practices by providers that increase health care costs.
○ Prohibiting Medicare Advantage companies from exaggerating patients’ health risks to get
paid more from the federal government.
○ Reforming the way doctors and providers are paid so pay is based on keeping people
healthy and providing quality care rather than performing a larger number of procedures.