Trump’s Budget And Tariffs Fuel 15% Hike In Individual Health Premiums

The cost of individual coverage under the Affordable Care Act could jump at least 15% for the 2026 benefit year thanks in part to policies pushed by the Republican Congress and the Donald Trump White House, according to a new analysis.

Health insurers that sell individual coverage under the ACA, also known as Obamacare, are proposing median premium increases of 15% for 2026, the analysis released Friday by KFF and the Peterson Center on Healthcare shows. It would be the biggest percentage increase in individual premiums under the ACA since 2018 during Trump’s first term in office.

“Based on the early indications, individual market insurers will introduce the largest hike in premiums since 2018, the last time policy uncertainty contributed to sharp premium growth,” authors of the analysis wrote.

Researchers blamed the “scheduled expiration of enhanced tax credits and the impact of tariffs” as key reasons health insurance premiums are on the rise. Trump earlier this month signed into law legislation that cuts $1 trillion from Medicaid and ACA plans that is expected to eliminate coverage for nearly 12 million Americans over the next decade, data from the Congressional Budget Office shows.

In the individual market, millions more Americans face the possibility of losing coverage because the legislation written by Republicans in Congress doesn’t extend tax credits signed into law by former President Joe Biden beyond this year. As the bill Trump signed into law takes effect, the reduced spending on these tax credits, or subsidies, means buyers of ACA plans will face higher premiums and out-of-pocket costs.

“Enhanced premium tax credits that make coverage more affordable will expire at the end of 2025, driving up out-of-pocket premium payments by over 75% on average,” researchers wrote in the analysis released Friday. “This is expected to cause healthier enrollees to drop their coverage and create a sicker risk pool.”

In addition, Trump’s tariffs on “some drugs, medical equipment, and supplies . . . could increase premiums by an average of 3% more than they otherwise would have,” researchers wrote.

Health insurers that sell individual coverage have already been telling Wall Street analysts and investors that they will be raising rates for 2026 given rising healthcare costs and new policies from the Trump administration.

Individual coverage under the ACA, in particular, has triggered several health insurers, including Centene, Molina Healthcare, Elevance Health and others to lower their profit forecasts for the rest of 2025. To cover the rising costs of care of the population buying individual coverage, these carriers are planning to raise rates.

Health insurers warned of steep rate hikes as they tried to convince Congress not to approve Medicaid cuts and reduced spending on tax credits to buy individual coverage.

“Due to new red tape and barriers to enrollment and re-enrollment, people losing eligibility for Medicaid will find an individual market with less choice and higher premiums,” the trade group and lobby America’s Health Insurance Plans (AHIP) said last month. AHIP represents some of the biggest providers of individual coverage including Centene, Oscar Health, Elevance Health, Cigna and an array of Blue Cross and Blue Shield plans.