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Dive Brief:

• Affordable Care Act plans across the U.S. are seeking a median 18% premium increase next year — more than double last year’s 7%, according to a new analysis of preliminary rate filings by health policy think tank the KFF.
• Insurers said the hike — the largest midpoint increase the industry has asked for since 2018 — is necessary due to elevated medical costs and utilization, along with the upcoming expiration of generous federal subsidies for ACA plans.
• Proposed rates could change before being finalized in late summer, the KFF said. Still, that includes the chance they could be upwardly revised as well, after some major payers told investors late July that they plan to refile plan bids to further raise premiums after seeing costs increase in the second quarter.

Dive Insight:

More than 24 million people signed up for ACA plans this year, a relatively small share of the overall U.S. coverage landscape but a record high in the exchanges set up by the Obama-era law. Growth since the beginning of the coronavirus pandemic has been fueled by an expansion of subsidies that’s made coverage more affordable for a greater swath of low- and middle-income Americans.

Those subsidies, however, are set to expire at the end of 2025 unless Congress moves to extend them. Market watchers view that as unlikely, given Republican antipathy towards the ACA and recent GOP steps to downsize federal healthcare programs.

The expiration of the tax credits is expected to raise consumers’ out-of-pocket expenses by more than 75% on average, according to the KFF. Insurers think that will cause healthier members to drop coverage, leaving sicker and more expensive people remaining in the plans. (If the subsidies expire, the Congressional Budget Office estimates about 4 million people will leave the ACA exchanges.)

Insurers are also dealing with a market-wide morbidity increase that’s driving higher spending, and saying that providers are asking for higher reimbursement rates in negotiations.

As a result, payers have been battening down the hatches to prepare for turmoil in 2026 — including by asking their state partners for hefty rate increases.

The median 18% rate increase is larger than the 15% increase outlined in an earlier KFF projection published last month. The newer analysis is based on more data, from upwards of 300 insurers participating in the ACA exchanges across all 50 states and Washington, D.C.

On average, ACA marketplace payers are seeking to raise premiums by about 20% in 2026, according to the KFF’s new estimates.

Of the insurers included in the analysis, just 4 proposed decreasing premiums next year.

Along with premium hikes, insurers are also submitting multiple rate filings to cover different policy scenarios, trimming their plans and even fleeing the ACA exchanges entirely.

CVS Health said in May that its insurer Aetna would stop offering ACA plans in 2026, citing big projected losses in the business. UnitedHealthcare could also exit select ACA markets next year if it can’t secure high enough rates, the insurer’s CEO said in late July.

Meanwhile, Centene — the largest marketplace insurer — said it pulled and refiled its plan bids for 2026 so that it could hike premiums, while Elevance and Molina also said they significantly raised premiums for ACA plans next year.