Private health insurance costs are going up. A complete guide to your coverage options

Private health insurance premiums will be going up in 2026 — in some cases, by a lot.

Congressional Democrats and Republicans remain deadlocked on health care reform, following disagreements over America's health insurance marketplace that contributed to November's government shutdown. At the heart of the issue is the extension of the enhanced premium tax credits — a key part of what has made plans affordable for many people.

If the enhanced credits currently available to Affordable Care Act (ACA) Marketplace enrollees are allowed to expire for 2026, the Urban Foundation predicts that 7.3 million people will lose their subsidies. Roughly 4.8 million people could become uninsured entirely.

Monthly premium payments for those who remain enrolled could increase by an average of 114%, according to estimates from KFF, a health policy organization.

Going without health insurance is a recipe for financial ruin. But while most workers get health insurance through their employers, many adults have to purchase coverage on their own. Full-time workers whose employers don't offer insurance benefits, self-employed professionals, gig workers and early retirees are just a few of the groups that can find themselves in this position.

The headlines look grim, and experts warn that higher prices are essentially locked in for the next year. But there are still ways to keep your costs in check. Here's everything you need to know about why health insurance costs are going up, the different options available for coverage — including ones you should stay away from — and how you can save.

Why are health insurance costs going up so much?

Health insurance premiums on the ACA Marketplace are set to rise sharply in 2026 due primarily to escalating health care costs and the scheduled expiration of the enhanced premium tax credits.

KFF says inflation in medical spending is a big reason the amounts insurers charge for Marketplace coverage are going up. But higher hospital costs and the rapid growth in the use of high-cost GLP-1 drugs like Wegovy and Zepbound — as well as concerns about tariffs — are also playing a role.

For enrollees, the biggest pinch will come from the expiration of the enhanced credits, which were originally introduced in 2021 during the COVID-19 pandemic and extended through the end of 2025 under the Inflation Reduction Act.

These credits expanded the availability of financial assistance for Marketplace enrollees, as well as the eligibility criteria for receiving financial help with premium payments. After they expire, some enrollees will find they no longer qualify for any assistance at all, while others will see the amount of their subsidies decline.

To save on insurance, start with a self-assessment

If you're planning to purchase private health insurance in 2026, start by ensuring your existing plan isn't set to auto-renew, says Rafael Espinal, executive director of the non-profit Freelancers Union. Doing so gives you time to evaluate your options without being automatically opted-in to higher rates (just keep an eye on enrollment deadlines when registering for your new plan).

Next, assess your personal health and financial situation. All health insurance policies, employer-sponsored or private, involve a trade-off: Pay lower monthly premiums and handle more expenses out of pocket, or pay more upfront for better coverage you may not need. Where you'll want to land on this spectrum is highly personal and depends on a number of factors.

"Are you an individual that really wants to spend a smaller amount for your premium and then pay larger amounts when you see the physician?" asks Victoria Killian, a Board Certified Patient Advocate (BCPA) and owner of Chronically Advocating. "Do you think you're ever going to hit that out-of-pocket maximum if you did?"

Answering the following questions can help inform how you think about that tradeoff, based on your needs and finances:

—How frequently do you and your family members need to access care throughout the year? While unexpected accidents, illnesses and disabilities can strike at any time, looking back at your health care spending over the past few years can give you a baseline understanding of what your health insurance costs will look like on various plans.

—Are you navigating a chronic condition or disability? If you expect to be a heavy user of health care services, paying a higher premium for a lower maximum out of pocket (MOOP) you know you'll hit can make sense. But you'll also want to evaluate plan options for durable medical equipment coverage, therapy visit caps and access to specific providers or prescription medications, says Killian.

—How will you cover unexpected medical costs? The best plan choice for you minimizes out of pocket expenses beyond your premiums, copays and coinsurance. But if you do find yourself facing unanticipated health care expenses, charity care and zero-interest payment plan options may be available to help.

One of the best resources to help you navigate these and other questions is an ACA-registered broker, says Kristin Happ, owner of Harnessing Healthcare, a 4,500-member Facebook group that seeks to advance health insurance transparency, health equity and access to care.

"Working with a broker is free; they are actually paid by the insurance companies when you are placed into a health plan," Happ explains. "They can be a wonderful tool because they can help you look at what your typical usage is."

The Find Local Help section of the Marketplace website can help you find a broker in your area. You can also ask for referrals from those in your network or any professional organizations you belong to.

Private health insurance options: The good, the bad and the ugly

For most adults who need private health insurance, enrolling in an ACA Marketplace plan is the simplest — and safest — option. Applying through the Marketplace grants you access to subsidized coverage if you qualify, and any plan you choose comes with important consumer protections (such as coverage for essential medical services, free preventive care, coverage for pre-existing conditions and no lifetime limits).

You can find out more about Marketplace plans and availability at healthcare.gov. Entering details about your family size and income will show you whether or not you qualify for subsidies. You'll also be able to review different plan types and tiers so that you can estimate your total out of pocket costs, taking your baseline health care usage into consideration.

Consider buying multiple plans

The most cost-effective private health insurance option for your family may be multiple plans — you aren't required to keep everyone on a single policy. "Some people will do certain plans for their children and different plans for themselves. Sometimes it benefits people to be on a family plan; other times it doesn't," says Happ.

But while the ACA Marketplace may be the easiest place to enroll in private insurance, it isn't your only option. The following solutions may offer more affordable alternatives — especially if you don't qualify for ACA tax credits — but pay close attention to their requirements and limitations.

— Cash pay or "self-insurance" Also known as "self pay," operating on a cash-pay basis means forgoing traditional insurance and opting to cover all of your medical expenses out of pocket. The 2021 Hospital Price Transparency Rule requires hospitals to make their standard charge information available, and in 2023, researchers at the Johns Hopkins Bloomberg School of Public Health found that cash prices were lower than median insurance-paid prices for 47% of "shoppable" health care services across 2,379 U.S. hospitals.But while it's possible to score substantial discounts by paying in cash, keep in mind that no cash discount will make the cost of a major medical issue manageable. The AARP puts the average cost of cancer treatment at $150,000, for example — something very few families can swing out of pocket in the event of an unexpected diagnosis.

— "Catastrophic" health insurance plans Catastrophic plans are available on and off the ACA Marketplace and are especially affordable because they deliver bare-bones coverage that's primarily intended to protect you from bankruptcy in the event of a major health crisis. Typically, this means the plans offer essential health services, provide a limited number of primary care visits and come with a high deductible.Eligibility for these plans was recently expanded in response to rising health insurance premiums but is still limited to individuals:Who are under age 30, orWho aren't eligible for premium tax credits or cost-sharing reductions due to their income, orWho can't purchase a qualified health program because the cost of the lowest-tier Bronze-level plan would exceed a set percentage of their income and cause hardship.

— Direct primary care or concierge medicine Direct primary care (DPC) and concierge medicine programs are not health insurance. Instead, they function like subscription services, giving you access to a single provider or group of providers for a set monthly fee. This fee typically includes office visits, simple procedures (like EKGs, skin biopsies and Pap smears) and discounted bloodwork and prescriptions.These programs are best paired with a high-deductible health plan, offering an affordable option to be seen in-office without paying out of pocket for each visit. However, be aware that DPC and concierge providers may not be able to manage more complex conditions, and they may not be able to make referrals to specialists if you need further care, depending on your insurance plan's restrictions.

— Professional organizations offering group coverage Many professional organizations offer group health insurance options to their members that can be cheaper than paying for private policies (though be aware that they don't all offer the same protections as ACA-compliant plans on the Marketplace). The Writers' Guild of America, for example, offers comprehensive health insurance coverage to members that meet eligibility criteria and their dependents.The Freelancers Union provides access to two group health insurance options: Solo Health and Opolis. "Solo Health has found a creative way to provide more affordable health care plans to the independent worker, so long the independent worker files for an EIN number and creates a business entity," says Espinal. Opolis has a similarly innovative model, through which Opolis becomes freelancers' employer of record, culminating in access to group health insurance.

— Coverage for gig economy workers Similarly, a number of health care options exist for workers in the gig economy.Uber, Lyft, Doordash, Amazon Flex and other apps partner with Stride Health to help contract workers choose ACA Marketplace coverage.App-based drivers in California can also qualify to receive quarterly health insurance stipends after meeting active-hours thresholds, thanks to the passage of California's Proposition 22 in 2020.Programs like UnitedHealthcare FlexWorkⓇ offer coverage designed specifically for hourly workers, but be sure to opt for ACA-compliant plans within the program that ensure essential benefits and patient protections.

— Non-ACA-compliant private health insurance plans Private health insurance plans exist outside of the ACA Marketplace, but — again — watch out for non-ACA-compliant plans that lack consumer protections, such as the requirement to cover specific services or pre-existing conditions.A few key types of non-ACA-compliant plans include:Fixed indemnity plans, which pay set benefits for specific health conditions upon diagnosis, but are not intended to replace comprehensive health insurance. Critical illness plans, limited benefit plans and hospital indemnity plans operate similarly.Short-term health insurance plans, which provide stopgap coverage for short periods (typically up to four months) but generally aren't ACA-compliant.Off-marketplace private plans, which are available through traditional insurers, hospital groups and other entities. These plans rarely meet ACA standards, may require underwriting to participate and may exclude pre-existing conditions for a set period of time.

— Healthshares Healthshare plans (also known as health care sharing ministries) are cooperative, often faith-based programs where members pay into a shared financial pool from which they can request reimbursement for qualified medical expenses after receiving care.While the structure of these plans resembles traditional health insurance, they are not federally regulated and do not offer the same consumer protections guaranteeing payment or covering pre-existing conditions. Some healthshare plans have been forced into bankruptcy, while others have a track record of allegedly not paying out benefits promised to subscribers.

— Medical tourism Medical tourism refers to the practice of seeking medical care in other countries where costs are lower and currency exchanges are favorable. Medical tourism options can provide high-quality care, but come with additional layers of risk and complication.Vetting providers thoroughly and seeking references is critical. You'll also need to plan how you'll navigate language barriers, recovery and any follow-up care needed after you return home.

— Dental care As in the case of medical tourism, a thriving dental tourism industry exists outside of the U.S., offering routine dentistry, major dental repairs and cosmetic improvements at substantial savings.For domestic discounts, look into dental schools, which regularly host student clinics offering affordable dental services in exchange for student practice hours.

— Prescription and medication savings Several options exist for saving money on medications, including:Direct purchase programs:Pharmaceutical companies like Lilly and Novo Nordisk offer savings card discounts and direct-to-consumer shipping on popular medications, including GLP-1s.Mark Cuban Cost Plus Drug Company: Cuban's passion project effort to reduce medication costs now includes thousands of prescription drugs offered at low costs with transparent pricing.Copay assistance programs: These programs, which are typically sponsored by drug manufacturers and charitable programs, provide financial help covering medication copay costs — typically for expensive or brand-name prescriptions.GoodRX: GoodRX is a free program offering prescription drug savings (just be aware that it's been fined in the past for illegally sharing consumers' health information).Costco: The retail giant is a surprising source of savings for many over-the-counter medications. As an example, a 365-tablet bottle of generic Zyrtec currently retails for $14.99 at Costco, compared to $3.09 for a 30 tablets via GoodRX. That means it'd cost you just over $40 to purchase the same quantity of tablets through GoodRX that you could buy at Costco for just $14.99.

The bottom line

Buying private health insurance can feel like choosing the best option from a bunch of bad alternatives. Educating yourself on what's out there and how different alternatives suit your unique needs and circumstances can help. But ultimately, more systemic change is needed to make health care affordable and accessible to all.

"Some individuals are going to be completely priced out of insurance, and they're going to end up not being able to afford insurance at all," says Killian, who recommends consumers contact their representatives and share their struggles. "That's the only way things get changed — if you persistently are contacting your elected officials to tell them how policies are directly impacting your everyday life."

(Visit Bankrate online at bankrate.com.)