The Twin Tiers & Beyond: Huge cost increases in health insurance in 2026

Health care costs in 2026 will have the largest increase in at least fifteen years. The Affordable Care Act (ACA), "Obamacare," was signed into law in 2010 by Barack Obama and was "temporarily" expanded during the COVID pandemic, increasing the financial assistance available for purchasing health insurance through the ACA marketplace, and reducing the percentage of income individuals had to pay for premiums; but what government program starts as temporary ever ends?

In 2022, Biden signed into law the Inflation Reduction Act (IRA) that extended the "temporary" added assistance from the ACA through 2025. When the IRA was passed, the ACA marketplace went from 11.4 million people in 2020 to 24.3 million by 2025. You see what's happening now as this extra assistance is set to end this year. The federal government was shut down by the Democrats over this. Extra temporary assistance was given to people making four times the poverty rate, and some retired early because of it. Their $400/month ACA rate will jump to over $1700 in 2026 when the temporary assistance is terminated, and they will have to go back to work. It is difficult to terminate government handouts that should have been phased out by now. It is easy to give, but not to stop giving.

Company health care plans are also expected to rise 6.5% in 2026, and there will be a rise in insurance premiums. Employee deductibles and out-of-pocket costs will increase. Some companies may eliminate their health care plans. Insurance companies are already raising 2026 premiums to reflect their added cost. Health care costs are double the general inflation rate. More people are not going to be able to afford health insurance. More people will be losing Medicaid coverage due to the new WORK requirements for able-bodied Americans living in their parents' basements, but "not qualified recipients".

I wrote about the problems ahead for Medicare in 2026. Insurance companies are making tough decisions about the plans they keep offering, and some they will be discontinuing. Some Medicare Advantage Plans have already notified people through the Annual Notice of Change (ANOC) that you should have received by the end of September, that their 2025 Advantage plan has been discontinued or costs are going up. As I mentioned, the cost of medical care is rising double the rate of inflation, and many insurance companies are scaling back their 2026 plans.

It is projected that two large Medicare insurers, Humana and UnitedHealthcare, may each drop over 500,000 members' plans in 2026, which aren't making money. Instead of losing money, they are cutting back. Insurers are dealing with new laws, higher healthcare costs and stricter rules. They may be raising prices, cutting benefits, or just dropping some plans.

The Advantage plans that give you the most freedom to see out-of-network providers, the Preferred Provider Organizations (PPO), are really taking it on the chin. They are more costly to run. Many are being dropped, and some replaced by Health Maintenance Organizations (HMO). These provide a specific network of providers. The list of choices in 2026 will be a lot smaller.

Medicare insurance providers are dealing with new laws, higher healthcare costs and a lot stricter rules. One of the new laws was when the "so-called" Inflation Reduction Act capped Medicare drug out-of-pocket costs at $2,100 in 2026, and that is great for seniors who take expensive medications. Now all insurers have to pick up more of the cost, so they're raising your premiums or cutting plan options to balance it out. Medicare added stronger protections for patients, like appeal rights and safeguards around hospital stays. They are important to us all, but cost money to provide.

Starting on Oct. 15, you may need to choose a new plan. The company that canceled your plan in 2025 may have other plans that you may choose from. Chances are, they will be more expensive than the old plan. You may want to search for other company plans, but you should do so by Dec. 7, when the Annual Enrollment Period (AER) ends. If you are on Medicare, it's all leading to fewer options and higher costs. Your present plan may be discontinued, especially if it is a PPO, like mine was. If not, you are going to see higher premiums, deductibles, or co-pays. Make sure you open your mail, especially that Annual Notice of Change this fall, and compare your options.

It is not just Advantage plans that are going up. The Medicare Part B (doctors and outpatient) premium is going up from $185 to $206.50 a month in 2026, an 11.6% increase. Many Part D (prescriptions) plans may nearly double, and may cut back on their drug lists. Many Medicare Supplemental plans will now face new limits on perks that they have been providing, like cutting out extras, like OTC allowances, transportation, nutrition support and home-delivered meals.

Why are medical costs rising so fast, other than new government regulations? Hospitals are swamped with ER visits, with illegal immigrants, and whether or not Medicaid is footing the bill or the hospitals absorb the cost. There are more mental health services. States that have legalized marijuana are having excessive hospital ER visits due to the effects of marijuana overdosing or poisoning. There is new hospital equipment to better diagnose and treat ailments. Prescription drugs cost more all the time, including generic drugs, and there may be tariffs on drugs from foreign countries.

If you are healthy, thank God every day you don't need medical care, but it will catch up to you, and it may be sooner than you think. You should at least have a primary care physician (PCP). Accidents and illnesses, minor and major, happen. Not all problems can be handled at the walk-in clinic or urgent care. Pray you can have good health today and always. May God bless you, your family, and the USA.

Ray Rinebold

bold330@aol.com