Marketplace benchmark premiums, the second-lowest-cost silver plans, have increased by 21.7 percent in 2026. This increase is substantially larger than the increase seen in the employer-sponsored insurance market, where increases are projected to be 6 to 7 percent in 2026. The 21.7 percent increase is also much higher than in prior years.
Why It Matters
The Affordable Care Act (ACA) Marketplaces, established in 2014, expanded coverage to as many as 24 million Americans. It has consistently been threatened with cutbacks. The 21.7 percent increase, even higher in many states, has led to claims that the ACA is fundamentally flawed, financially out of control, and requires significant restructuring and cuts. We find that the 2026 premium increases are an aberration, far above those observed in recent years.
What We Found
We show that the extraordinary 21.7 percent premium growth between 2025 and 2026 was in sharp contrast to the average 2.0 percent growth between 2020 and 2025. The 21.7 percent increase partially reflects medical trends which are also seen in employer-sponsored plan increases, the estimated increase in risk because of the expiration of premium tax credits, and the increased uncertainty because of various provisions of the One Big Beautiful Bill Act (OBBBA). Other Urban Institute work has shown that the expiration of premium tax credits will result in 7.3 million fewer subsidized Marketplace enrollees. Changes from regulations and the OBBBA will also affect enrollment by an estimated 5.0 million. These will increase the number of uninsured by 4.8 and 2.6 million, respectively. This all creates more uncertainty and risk for insurers.
We also addressed reasons for the average 2.0 percent increase in premiums over the 2020 to 2025 period. We find that this is largely because of the significant competition resulting from the basic incentives in the ACA Marketplaces. Premium tax credits are tied to the second-lowest-cost plan. Any insurer offering a policy for significantly more than the benchmark premium risks having very little market share, e.g., attracting fewer enrollees. Individuals must pay the full marginal cost of the premium of a higher-cost insurer. Competition over premiums has led to lower premiums and lower premium growth. Marketplaces have also expanded over time, improving the risk pool and attracting more insurers, which further reduces premiums through increased competition. Our regression analysis confirmed that the number of participating insurers was associated with lower premiums.
In 2026, along with increasing premiums to protect against the uncertainty of ending up with a sicker risk pool, 21 states had a decrease in the number of insurers. Aetna, a prominent insurer, left all Marketplace regions in which it had participated.
How We Did It
We use data from federal and state sources to identify premiums and insurers for 2020 through 2026. We estimated linear regressions to seek to understand factors associated with variation in premiums across states. We then examined changes in participation by insurers. Finally, we looked in detail at changes in insurer participation and pricing in selected cities and rural areas.
