The American healthcare system, already the most expensive in the world, is facing another significant cost hike. In the coming weeks, approximately 160 million Americans who receive health insurance through their employers will see an 8 to 10% increase in costs, the largest jump in over two decades. This surge is part of a series of three major shocks to healthcare costs and coverage, with the first occurring in January 2026 when Affordable Care Act (ACA) Marketplace enrollees saw their after-subsidy premiums rise by an average of 114%. The third shock is expected next January when Medicaid work-reporting requirements take effect, potentially pushing nearly 6 million people out of coverage.
For those who buy their own insurance, the enhanced premium tax credits expired at the end of 2025, leading to a 114% increase in after-subsidy premiums. This resulted in a 12% drop in enrollment, with many opting for skimpier plans or leaving the market altogether. The average premium paid by Marketplace enrollees hit $178 a month in 2026, 58% higher than in 2025. Insurers have proposed another 15% increase for 2027 on top of this year’s 20% hike.
Employer-sponsored health plans are also facing significant cost increases. Benefits consulting firms project total costs to rise 8 to 10% next year, driven by factors like increased use of care, expensive new drugs, hospital consolidation, and AI-assisted billing. For a typical worker, this translates to roughly $400 to $500 more in costs. Employers are also making plans less generous by raising deductibles and cutting back on covered services to manage costs.
The Medicaid program is set to undergo changes as well, with work-reporting requirements starting January 1, 2027. The Congressional Budget Office (CBO) estimates that about 5.7 million people will lose Medicaid coverage by 2034 due to these requirements. Additionally, other Medicaid cuts, such as more frequent eligibility checks and shortened retroactive coverage, are expected to leave 7.5 million more people uninsured by 2034.
These ongoing shocks to healthcare costs are creating a generational opportunity for reform. With healthcare costs already a top concern for voters, the current hikes may spark significant changes in the political landscape.