The drug price hikes that are helping drive the health affordability crisis will continue for the rest of President Trump’s term, key industry stakeholders are now predicting —despite his deals with drugmakers and Medicare negotiating lower prices.
The big picture:
Insurers, drug supply middlemen and hospitals who represent 13% of all pharmaceutical purchases predict single-digit price increases for branded drugs over the next three years, according to a new survey by TD Cowen.
The increase will be largely driven by pricey new medications, such as drugs for cancer, diabetes and obesity, as well as cell and gene therapies, the purchasers said.
Drugmakers are already set to raise prices this year on at least 350 medications, including common vaccines and cancer treatments.
State of play:
Democrat and Republican policymakers have prioritized lowering drug prices in recent years in response to mounting public concern over health costs.
Congress during the Biden administration passed the Inflation Reduction Act, allowing Medicare to negotiate lower prices for select drugs.
Trump has made direct deals with drugmakers for decreased U.S. prices on certain products.
Yes, but:
TD Cowen’s latest annual drug purchaser survey shows these policy interventions aren’t driving prices down, at least in the near term.
Insurers, pharmacy benefit managers and other payers said they expect their cost of acquiring a drug to increase by 8%, on average, over the next three years. They gave the same figure when surveyed in 2024, 2023 and 2022.
Prices for generic drugs are predicted to increase by 2% over the same period.
“As long as biopharma delivers innovation, we see no change in the upward trend in drug prices,” TD Cowen wrote in its analysis.
By the numbers:
44% of purchasers surveyed expect Medicare drug negotiations to have a modest impact on cost, and another 30% said they don’t think they will have any impact.
But 74% said they think drug usage will increase over the next five years due to the policy changes and the IRA’s out-of-pocket cost protections for seniors.
Reality check:
Patients aren’t necessarily going to see an out-of-pocket increase as drug acquisition prices rise, due to rebates and other discounts.
But payers often pass increased costs along to patients, including by raising monthly premiums.
Net drug prices increased one-tenth of a percent in 2024 after accounting for rebates and discounts, per an IQVIA report published in April.
What they’re saying:
Patients “bear an unfair burden as out-of-pocket costs have risen faster than the net prices paid by PBMs and insurers,” PhRMA spokesperson Chanse Jones said. “At the same time, innovation … continues to skyrocket.”
Advocacy group Patients for Affordable Drugs said in response to the survey results that the IRA’s reforms are working for seniors.
“[T]hat’s exactly why expanding and protecting the law matters,” Alyson Bancroft, director of policy, legislation and alliances, told Axios in an email.
Health and Human Services communications director Andrew Nixon told Axios the agency doesn’t weigh in on third-party analyses, but said HHS continues to advance policies to lower drug costs so patients can afford treatments.
What we’re watching:
Purchasers expect coverage of obesity drugs to grow over the next three years.
Almost 30% of respondents said they currently have very limited coverage of GLP-1s for obesity, but nearly 20% said they expect to offer complete coverage for a finite amount of time within three years.
Medications for diabetes, obesity and rheumatological conditions were cited as likely to have the greatest decrease in price over the next three years. That’s due to coming patent expirations and increased competition among advanced products, TD Cowen noted.
In mid-December, members of Congress members left Capitol Hill for the final time in 2025, thus ensuring that the year would end with a failure arguably more significant than anything they accomplished during the prior 12 months: the end, despite a widespread public clamor for action, of subsidies put in place during the pandemic that made premiums of ACA marketplace plans affordable for millions of Americans.
Although important health care stories often fail to get much media attention, the failed efforts – mostly, but not exclusively, by Democrats – to save the Affordable Care Act/Obamacare subsidies were different. As patients from Maine to California opened their yearly renewal letters, many were shocked to see their monthly premiums for 2026 would be doubling or even tripling – right when the rising cost of living was already the No. 1 voter concern.
But there’s another aspect to America’s looming health care crisis that almost no one is talking about.
This is the other side of the coin – the out-of-pocket expenses that everyday consumers pay for doctor visits or prescription drugs – because of higher deductibles, or because of the growing number of patients who will risk not having any insurance at all next year because they can no longer afford it.
Even before the new year began, many Americans were dreading a double whammy of skyrocketing premiums and a sharp spike of what they expect to pay on top of that, out of their own pockets.
For example, Doug Butchart of Elgin, Ill., told ABC News that while his wife Shadene – who is living with the neurological disorder amyotrophic lateral sclerosis (ALS) – paid about $3,000 in out-of-pocket costs last year, that’s expected to rise as high as $10,000 in 2026, on top of monthly premiums that are tripling with government inaction on the ACA subsidies. It’s all more than the senior couple currently earns from Social Security.
Of course, millions of other Americans who switched to insurance plans that trade lower monthly premiums for sharply higher deductibles are taking an economic gamble that won’t play out until they see how healthy they are in 2026. In particular, those joining the surge of patients switching their ACA health coverage from the common Silver plan to the lower-premium Bronze coverage could pay thousands more as a result.
An analysis by KFF, the health care think tank, found that the average deductible in 2026 for patients who sign up for a Silver plan, assuming no reductions for cost sharing, will rise to $5,304, but for those who opt into a Bronze plan, the average deductible will spike to $7,576 – meaning a more than $2,000 higher outlay for sicker patients who max out on their covered expenses.
Katie Keith, director of Georgetown University’s Center for Health Policy and the Law and a former Biden administration aide, said the skyrocketing cost of insurance means “people are so premium sensitive that they might still go with Bronze and kind of leave money on the table – then they’re facing at least a $9,000 deductible, or whatever out-of-pocket max is, and just huge burdens.”
Keith and other health policy experts see a perfect storm of negative factors for higher out-of-pocket expenses in 2026 – from the impact of generally rising health costs to the added burden of government inaction or indifference in Washington. Among the factors behind a looming crisis:
Last summer, the Trump administration finalized new rules for the ACA that changed a key calculation and thus increased the maximum in out-of-pocket expenses that can be set by insurers – a ruling that also affects the millions of Americans who receive health insurance through a private employer.
The new math proposed by the Trump administration’s Centers for Medicare and Medicaid Services (CMS) adds yet another 4% hike on top of an already expected steep increase. The higher limit means individuals in some plans will pay $10,600 before their insurance kicks in, with a bump to $21,200 for families – an overall increase of 83% for individuals and 67% for families since the out-of-pocket maximum established by the ACA went into effect in 2014.
The Center on Budget and Policy Priorities reported that, because of these changes, a family of two or more people on the same plan could face an additional $900 in medical bills if a family member is seriously ill or injured in 2026.
Increasingly, employers are putting more of the economic burden on their workers for health care costs, especially through higher deductibles. For one thing, the KFF Employer Health Benefits Study has found that – for employees whose coverage carries a deductible, on individual plans – that average out-of-pocket cost has outpaced inflation and more than tripled in less than two decades, from $567 in 2006 to $1,887 in 2025.
What’s more, increasing pressure for workers to share the cost burdens of their health insurance has also caused more employer plans to offer a higher deductible option, and more people are signing up for that risk. Federal data shows that while only 38% of private-company employees had the option for a high-deductible plan in 2015, that number has now risen to more than half.
Perhaps the biggest factor is the end, for now, of the tax credits that had been holding down the cost of monthly premiums for ACA marketplace coverage since the COVID-19 epidemic. In states gathering data about early enrollment trends this past fall as higher premium notices went out, the shift away from traditionally popular Silver plans into Bronze coverage, with its higher out of pocket costs, has been dramatic.
For example, in California, where the Covered California program is considered a trailblazer in public health plans, officials told NBC News they’ve seen a “substantial” movement of enrollees choosing the Bronze plans with the highest out-of-pocket deductibles. Typically, officials reported, about one in five new enrollees go with the Bronze option, but for 2026 that number has soared to more than one-third. It’s a similar story in Idaho, where officials told NBC that Bronze enrollments are running 5% higher than normal, with most moving from Silver plans.
“There’s a lot yet to be seen, but there are definitely some early warning signs in terms of the decisions consumers are having to make in reaction to the changing federal policy,” Jessica Altman, executive director of Covered California, told the network.
Even more worrisome, however, is the number of Americans who are cancelling their ACA marketplace coverage altogether, because – all evidence suggests – they can no longer afford the premiums for any level of plan. In Pennsylvania, after families began receiving notices that – in many cases – their premiums had doubled, officials reported that about 40,000 people dropped their coverage, which is double the total from the 2024 enrollment period. What’s more, new enrollments in the Keystone State are also running about 20% lower than this time last year.
This is on top of a growing number of people – especially in the younger age brackets – who are switching to other low-cost alternatives that also are essentially a big gamble. These include so-called short-term plans, which are not compliant with ACA coverage requirements and that often come with annual or lifetime caps on coverage, don’t cover certain critical expenses like prescription drugs or paternity care and can penalize patients with preexisting conditions. There are also so-called catastrophic plans, which usually carry the maximum allowable deductible and which – in recognition of the worsening health insurance climate in the U.S. – have been expanded as an option to consumers over age 30. You may have even heard ads for faith-based sharing plans, whose members pool their expenses. People who sign up for those plans often find out they are not covered for a serious illness.
No wonder growing numbers of us are more anxious about the cost of health care than any time since the ACA was enacted in 2010 – perhaps ever. In November, a West Health-Gallup survey found that 47% of U.S. adults are worried they can’t afford health care next year – the highest number since the survey began in 2021. Those surveyed cited the rising cost of out-of-pocket requirements for prescription drugs in particular. And the number of Americans who say the cost of health care is causing “a lot of stress” in their daily lives has nearly doubled since the survey began, to 15%.
Georgetown’s Keith noted that – with patients and their families getting hit with higher costs on all sides – both the federal government and individual states have shown there are legislative actions that can reduce out-of-pocket costs for these anxious consumers. These include the federal No Surprises Act, which was signed into law by President Donald Trump in 2020 to address surprise medical bills, and a $2,000 annual cap on prescription drug costs for Medicare beneficiaries that went into effect in 2025 (it will rise to $2,100 this year), as well as various state efforts to curb tack-on facility fees or impose limits on insulin charges.
“There are many different flavors – ways that patients are getting charged,” Keith said. Indeed, that’s the bad news, since many of the fixes that lawmakers have been working on feel like bail-out buckets of water against a tsunami of rising medical expenses that in 2026 threaten the broader American economy, not to mention the national psyche.
Rising out-of-pocket expenses might be the looming health crisis that no one is talking about, but the lack of media coverage is likely to change over the course of 2026 as horror stories trickle in from those who gambled on not getting sick over the next 12 months – and lost that wager.
There’s a good chance your health insurance premiums are going up next year, regardless of where you get coverage.
Why it matters:
The spike in what millions of Affordable Care Act plan enrollees pay will be acute, but workplace insurance is getting more expensive, too — and all at a time when affordability is prominently on Americans’ minds.
ACA premiums have dominated the political discourse in Congress for weeks, but there’s no real sign that any relief is coming from Washington.
Even extending the Biden-era enhanced ACA subsidies — which most Republicans don’t want to do — would do nothing to address what’s driving the surging cost of care or employer insurance affordability issues.
And all signs point to Democrats hammering Republicans for high costs in all forms of health insurance leading up to next year’s midterm elections.
The big picture:
Health insurance gets more expensive almost every year, keeping up with increases in the costs of procedures, tests, drugs and more. But some years see bigger jumps than others, and 2026 is looking like one of those years.
That means tough choices for families, employers and workers all faced with shouldering higher premiums or out-of-pocket spending. Some will conclude it’s prohibitively expensive and go uninsured.
Another thing that’s different about this year is that the white-hot political rancor around ACA premiums is putting health insurance back centerstage politically.
By the numbers:
ACA insurers themselves are raising premiums by an estimated 26%, in part due to rising hospital costs, higher demand for pricey GLP-1 drugs like Ozempic, and the threat of tariffs.
But add in the loss of federal subsidies, and the increase is 114% — or more than double what they currently pay, according to KFF. 22 million out of 24 million marketplace enrollees now receive subsidies.
Premiums in the small group employer market will go up by a median of 11%, also per KFF, due to some of the same reasons insurers cite in ACA markets.
For employer health insurance, there’s no comprehensive data yet for 2026, but estimates from earlier this year put the increases in the high single digits.
Policymakers and advocates often promote drug price transparency to lower costs and improve equity. While transparency is an important first step toward accountability and informed public budgeting, it does not guarantee affordable prices or fair access to medicines.
Transparency Has Some Benefits
Drug price transparency helps show how and why medicines cost what they do along the supply chain (i.e., from the manufacturer to the pharmacy), which makes it easier to identify where costs can be reduced or better regulated. By making this information public, transparency allows patients, payers, and policymakers to make more informed decisions and encourage manufacturers to prices drugs more fairly. Ultimately, it supports a fairer system where patients can better afford and obtain the treatments they need, improving access to care.
States with Drug Transparency Laws
While federal policy to improve price transparency is lacking, the states have moved to make things clearer for patients and payers. Vermont was the first U.S. state to enact a drug price transparency law in 2016. Since then, many others have followed suit. At least 14 states have passed some version of transparency legislation, though the details and their enforcement of these laws differ widely.
For example, only Vermont and Maine require drug companies or insurers to disclose the actual prices paid after discounts (called the “net price”). Alternately, Oregon and Nevada require drug manufacturers to publicly report their profit to state government agencies. And Connecticut, Louisiana, and Nevada mandate pharmacy benefit managers (PBMs) to report the total rebates they receive, but not the amounts for each specific drug. Despite these efforts, no state has yet achieved full transparency across the entire drug supply chain.
Transparency is Not Enough
Even with clear pricing, Americans still pay about 2.6 times more for prescription drugs than people in other wealthy countries. Early evidence suggests that these laws have done little to curb drug prices. To date, only four states – California, Maine, Minnesota, and Oregon – have published analyses of their own laws. These reports share common concerns: difficulty tracking pricing across the supply chain and uncertainty about whether state agencies have the authority (or the will) to act when data is incomplete or unreliable.
Most transparency laws fall short on requiring detailed cost or profit data, focusing instead on broad price trends. As a result, this narrow scope makes it difficult to identify the exact drivers of high drug prices. Even when transparency discourages manufacturers from raising prices, these policies do not directly control pricing or define what constitutes an ‘unjustified’ price increase. Manufacturers can simply adjust by setting higher launch prices or implementing smaller, more frequent increases to stay below reporting thresholds. Still, the result is a system where drug costs can vary by as much as $719 for the same 30-day prescription even when prices are publicly listed.
What can also be done?
Creating a consistent national framework could replace the current patchwork of state laws and improve oversight of how drugs are priced. For example, the Drug Price Transparency in Medicaid Act (H.R. 2450) could do just that: it would standardize reporting requirements and reveal how drug prices are set, rebated, and reimbursed. But transparency alone can’t lower costs—it only shows the problem.
To make transparency meaningful, policymakers must address the underlying contracts and incentives that drive high prices.
Hidden rebate deals and opaque pricing structures between PBMs and drugmakers often inflate costs and limit patients from seeing savings. Transparency legislation should also be paired with value-based pricing that links payments to clinical benefits. Federal programs like the Medicare Drug Negotiation Program provide additional leverage, but broader reforms are needed to reach the commercial market (i.e., where most Americans get their prescription drugs and still face high prices).
Still, transparency can have downsides, especially globally. Fully public drug prices could push companies to stop offering lower prices in low- and middle-income countries. To avoid cross-country comparisons, they could raise prices across the board, making medicines less affordable where they’re needed most. To make transparency more equitable, policymakers should combine disclosure with protections that preserve affordability worldwide.
Conclusion
In short, transparency is necessary but an incomplete fix for America’s drug pricing system. Simply shining a light on how prices are set isn’t enough. Policymakers need to be paired with other reforms, such as removing the incentives that encourage high prices, holding PBMs and manufacturers accountable, extending the negotiating power beyond Medicare, and protecting prescription drug access both at home and abroad. Without these other steps, transparency laws risk highlighting unfairness without actually improving it.
Millions of ACA enrollees will face steep premium hikes in 2026 as insurer rate increases collide with the expiration of enhanced federal subsidies.
As health insurance premium costs have taken center stage this fall, you may have seen seemingly conflicting reports about how much premiums are increasing, especially for ACA marketplace plans. This isn’t a reporting error. Instead, it reflects a double whammy of increases that more than 20 million ACA enrollees are poised to face in 2026.
To understand what’s happening, it helps to think of ACA premium increases as a one-two punch.
The first hit comes from the overall increase in health insurance premiums for 2026. On average, insurers raised premiums for ACA marketplace plans by roughly 26 percent from 2025 to 2026. This increase reflects a rise in the total cost of coverage, the full premium paid jointly by enrollees and the federal government through subsidies, not just what individuals pay out of pocket.
Premium increases are not new. Insurers raise rates every year. But the 2026 hike is striking: more than three times the 7 percent increase in 2025 and the 6 percent increase in 2024. Insurers have attributed roughly four percentage points of this increase to the anticipated expiration of the enhanced premium tax credits, arguing that enrollment will decline and that sicker, higher-cost enrollees will make up a larger share of the risk pool. Insurers also cite provider consolidation and high pharmaceutical prices as drivers of higher premiums.
These explanations deserve scrutiny. As Wendell Potter recently documented, the seven largest private insurance corporations have collectively taken in more than $10 trillion in revenue since 2014 with revenues steadily increasing each year. Against that backdrop, claims that today’s premium spikes are unavoidable or purely defensive ring hollow.
The second hit falls directly on consumers who currently rely on enhanced premium subsidies (in the form of tax credits) to make coverage affordable. Those enhanced subsidies, first made available during the pandemic, are set to expire at the end of 2025, and Congress appears poised to let them lapse without an extension. If that happens, many enrollees will see the tax credits that lower their monthly premiums shrink dramatically or disappear altogether. Taking this into account, the amount people pay out of pocket for ACA premiums is expected to increase by an estimated 114 percent in 2026. And that is just for the premiums. People enrolled in ACA plans will also have to spend hundreds if not thousands of dollars out of their own pockets in deductibles and copays before their coverage kicks in.
This double whammy will have drastic, and potentially deadly, consequences for millions of Americans. I am already seeing panic from people in my own community and across the country, echoed daily on social media. Yet Congress has taken no action to cushion the blow. The Republicans leading both the House and the Senate are leaving Washington without extending the enhanced tax credits, even as the clock runs out.
This is an abdication of Congress’s responsibility to represent the people it serves, people who have been clear about what they want and need: health insurance they can actually afford. Rather than getting bogged down in partisan gridlock or abstract market ideology, Congress must act now to extend the enhanced premium tax credits. That extension should be treated as an urgent bridge to a real fix to our health care system; one that reduces dependence on Big Insurance, lowers costs for patients, and ensures that no one is forced to go without care.
2025 was one of the most turbulent years in modern U.S. healthcare. The headlines were explosive, the rhetoric dramatic and the controversies nonstop. Yet for all the hoopla and upheaval, the medical care Americans received this month looked almost identical to what they experienced on January 1 — except more expensive.
That yearlong pattern (of intense disruption followed by little improvement) played out across nearly every major healthcare storyline.
Luigi Mangioli is preparing to stand trial almost exactly twelve months after the fatal shooting of UnitedHealth CEO Brian Thompson. The killing sparked fears for major health insurers and raised questions about the fragility of the nation’s largest payer. In a February article, I called it a defining moment for UnitedHealth: an opportunity for the company to start competing on health, not denials. But despite the initial shock and ongoing scrutiny, nothing has shifted in how UnitedHealth pays for (or denies) medical care.
Then, in late fall, the nation endured the longest government closure in U.S. history, driven largely by conflicts over healthcare spending and the Affordable Care Act’s health exchanges. However, the eventual resolution to reopen the government came with no respite for the 24 million Americans currently enrolled in an exchange.
For a broader view of the year, here are five major areas of healthcare that generated chaos, confusion and conflict in 2025 – but little meaningful improvement.
1. Political chaos: Turning science into a battleground
No aspect of healthcare saw more volatility in 2025 than in the political arena. The tone was set in January when President Trump returned to office and began reshaping federal health agencies with unprecedented speed.
Within days, he issued a record flurry of executive orders targeting the Affordable Care Act, Medicaid waivers, Medicare Advantage oversight, prior-authorization rules and federal nutrition standards.
He replaced long-entrenched leaders at HHS, NIH, CDC and FDA with political outsiders, many of whose views on vaccines, chronic disease and scientific evidence diverged sharply from the career experts they superseded. The nomination of RFK Jr. to lead HHS became a flashpoint. His reluctance to confront the measles outbreak in Texas, combined with mixed messaging on vaccine policy, have deepened concern for public health.
2. Economic crisis: Costs soar as coverage grew more fragile
Beneath the political theatrics of 2025 was a sobering reality: Americans will once again pay far more for healthcare next year than the year before. And for many, the financial protections that once softened those increases are disappearing.
Insurers on the Affordable Care Act (ACA) marketplace requested median premium hikes of 18% for 2026, the steepest jump since 2018 and well above this year’s 7% hike. If Congress fails to extend the enhanced ACA subsidies, families who once paid affordable monthly premiums will see their costs double or even triple.
The broader economic picture makes these pressures unavoidable. The United States is now spending $5.6 trillion annually on healthcare. National health expenditures are projected to climb another 7.1% this year, far outpacing economic growth. At the same time, federal debt service continues to soar, consuming more of the national budget than Medicaid itself.
The result is an economic crisis hiding in plain sight, one that will increasingly strain the financial, physical and mental health of Americans in the year to come.
3. Regulatory confusion: Agencies rebooted but didn’t improve health
This year shook the foundations of America’s public-health architecture and left yawning gaps where trust, clarity and expert oversight once stood. Politics has replaced science as the primary driver of healthcare policy.
The Centers for Disease Control and Prevention lost its director just weeks after her confirmation. Within days, top-level scientists and center heads resigned en masse, citing political interference and a collapse of scientific independence. Months later, there still is no permanent CDC head.
At the Food and Drug Administration, career reviewers say they’ve been forced to reconsider or abandon scientific best practices. Across both the CDC and FDA, advisory committees that once evaluated evidence through rigorous, peer-driven processes now rely on anecdote and ideology. One striking example is the FDA’s decision to stop requiring hepatitis B vaccination at birth, a move that public-health experts warn could lead to tens of thousands of additional infections for a disease that had been reduced to fewer than 20 annual cases.
Meanwhile, the administration’s sweeping “health-freedom agenda” (under the banner Make America Healthy Again) has identified food packaging, additives, school-lunch standards and “ultra-processed” diets as public-health priorities. But the proposals to improve nutrition remain largely unformed, as the likelihood of meaningful improvements fade.
What remains at year’s end is a set of agencies still functioning, but with public trust weakened and no clear path to rebuilding it.
4. Technological contradiction: AI leapt ahead while medicine stood still
No field generated more excitement, or exposed more contradictions, in 2025 than generative artificial intelligence.
In the broader economy, GenAI models transformed finance, logistics, law, retail and customer service. New large language models, including GPT-5, DeepSeek and Gemini 3, demonstrated near-expert performance on clinical reasoning, interpretation of complex symptoms and risk prediction. Ambient listening matured into a reliable documentation tool, and with the emergence of Artificial General Intelligence (AGI), Americans are relying on large language models when they have medical questions.
Yet inside traditional medicine, progress remains stalled. Clinicians continue to be encouraged to use AI for administrative shortcuts (coding, charting, prior authorization claims) but national specialty organizations haven’t pushed them to use GenAI for diagnosing disease, reducing medical errors or improving clinical outcomes.
Fear of liability has discouraged technology companies from offering GenAI tools that would allow patients to evaluate symptoms or manage their chronic diseases. Yet usage continues to grow. In polling I conducted this fall, 77% of patients and 63% of healthcare professionals reported using a generative-AI tool in the past three months for health-related information or decision support. Meanwhile, medical schools still teach pre-AI workflows, even as medical students and residents turn to GenAI for clinical knowledge and case analysis. The divide between institutional practice and the behaviors of patients and the next generation of physicians is expanding at an accelerating pace.
5. Cultural conflict: A growing divide between the public & the profession
If 2025 revealed anything about American healthcare, it was a widening cultural rift: between younger patients and medical professionals, and between science and public belief.
This rift is felt particularly among Gen Z and Millennials, generations that grew up online, accustomed to second-screen verification and skeptical of traditional authority. As I wrote in 3 Ways Doctors Can Win Back Gen Z And Millennial Patients, younger Americans expect shared decision-making, transparency and digital-first convenience — expectations medicine failed to fulfill in 2025.
At the same time, disinformation and political rhetoric seeped deeper into public life. Social media spread half-truths faster than public-health leaders could correct them. Vaccine skepticism rose thanks to political disinformation. Basic nutritional science became partisan, too. And the public’s confusion only intensified.
What 2025 reveals about the road ahead
By year’s end, one truth became impossible to ignore: despite unprecedented political turmoil, economic instability, scientific breakthroughs and cultural upheaval, the basic structure of American healthcare remained unchanged.
The incentives driving the system, the chronic diseases afflicting the population and the unaffordability confronting families all persist as we enter 2026. At the same time, as generative AI transforms nearly every other sector of the economy, the fax machine remains the most common method physicians use to exchange vital medical information.
The question now is whether mounting economic, political and cultural pressures will finally force American medicine to transform care delivery next year. For more on that, follow me on Forbes and look for my next article on January 5, featuring my healthcare predictions for 2026.
There’s a good chance your health insurance premiums are going up next year, regardless of where you get coverage.
Why it matters:
The spike in what millions of Affordable Care Act plan enrollees pay will be acute, but workplace insurance is getting more expensive, too — and all at a time when affordability is prominently on Americans’ minds.
ACA premiums have dominated the political discourse in Congress for weeks, but there’s no real sign that any relief is coming from Washington.
Even extending the Biden-era enhanced ACA subsidies — which most Republicans don’t want to do — would do nothing to address what’s driving the surging cost of care or employer insurance affordability issues.
And all signs point to Democrats hammering Republicans for high costs in all forms of health insurance leading up to next year’s midterm elections.
The big picture:
Health insurance gets more expensive almost every year, keeping up with increases in the costs of procedures, tests, drugs and more. But some years see bigger jumps than others, and 2026 is looking like one of those years.
That means tough choices for families, employers and workers all faced with shouldering higher premiums or out-of-pocket spending. Some will conclude it’s prohibitively expensive and go uninsured.
Another thing that’s different about this year is that the white-hot political rancor around ACA premiums is putting health insurance back centerstage politically.
By the numbers:
ACA insurers themselves are raising premiums by an estimated 26%, in part due to rising hospital costs, higher demand for pricey GLP-1 drugs like Ozempic, and the threat of tariffs.
But add in the loss of federal subsidies, and the increase is 114% — or more than double what they currently pay, according to KFF. 22 million out of 24 million marketplace enrollees now receive subsidies.
Premiums in the small group employer market will go up by a median of 11%, also per KFF, due to some of the same reasons insurers cite in ACA markets.
For employer health insurance, there’s no comprehensive data yet for 2026, but estimates from earlier this year put the increases in the high single digits.
For example, according to Mercer, health benefit costs are expected to increase 6.5% per employee in 2026, and many employers are planning to limit premium increases by raising out-of-pocket costs for employees.
One factor driving these increases is advances in medicines, like new cancer treatments, that are more expensive, according to Mercer.
But people are also using health care more, per Mercer. That’s possibly because they missed or delayed care during the pandemic — but also because the use of AI in doctors’ offices gives them more capacity and allows them to work faster.
Between the lines:
Just this month, Gallup polling found that approval of the ACA has hit an all-time high of 57%, including more than 6 in 10 independents but only 15% of Republicans.
Another recent Gallup poll found that 29% of Americans say that cost is the “most urgent health problem” facing the country, up from 23% a year ago.
The bottom line:
Get ready to hear a lot more about health care costs over the next year — while potentially also experiencing your own premium increase.
Next year, seniors and families will have more stringent and more unaffordable health coverage thanks to new AI-driven prior authorizations in Medicare and loss of subsidies in the ACA.
The New Year is just two weeks away, and when Americans wake after clinking champagne and kissing at midnight, the health care landscape in the United States will be in worse shape than it was in 2025. There is a growing list of why that’s true, but here are a couple of developments that will make it harder for many of us to get the care we need:
The December 31 expiration of the Affordable Care Act enhanced subsidies, which will lead to millions of Americans losing coverage and make premiums barely affordable for millions of others; and
CMS’s January 1 implementation of a new pilot project that will put private, for-profit contractors using AI-powered prior authorization in traditional Medicare.
Unless policymakers change course, many Americans will be ringing in 2026 with higher costs, less access and a nasty health care hangover.
WISeR strikes at 12
As we’ve reported, the implementation of the Wasteful and Inappropriate Service Reduction (WISeR) model’s will mark the first time in traditional Medicare’s 60-year history that for-profit companies will decide whether seniors receive certain medical services their doctors recommend. Six companies — many with deep ties to Big Insurance and insurer-backed venture capital — will suddenly have the power to say yes or no to 17 procedures that never required prior authorization before. And for these companies, the more the denials, the bigger the profits.
As Dr. Seth Glickman documented after sitting through CMS’s own WISeR webinar, the rollout has been vague on details and confusing to providers and patients. CMS even admitted during the webinar that the vendors chosen to administer the model were selected in part based on their “success” of using prior authorization in the private Medicare Advantage program, which is notorious for denials, delays and life altering decisions.
Some lawmakers in Washington have taken notice. A coalition of Democrats introduced the Seniors Deserve SMARTER Care Act, warning that WISeR creates “a dangerous incentive to put profits ahead of patients’ health.” Imposing prior authorization in traditional Medicare “will kill seniors,” said Rep. Mark Pocan, one of the bill’s sponsors.
Kiss subsidies goodbye
While WISeR threatens seniors’ access to care, millions of working families are facing a different New Year’s surprise: the expiration of enhanced ACA marketplace subsidies, which Congress has (so far) failed to extend or replace. As Rachel Madley, PhD wrote in October, families will have to gamble when they pick a health insurance plan. She added:
The enhanced premium subsidies being debated in Congress right now are a lifeline for so many of us and must continue in the short term, but they don’t fix the underlying problem: Private insurers extract value rather than control costs or provide access to necessary and affordable care. Decades of experience show that when profits rule health insurance, families face financial ruin no matter which plan they pick during open enrollment.
But as we’ve noted before, this isn’t an existential crisis for Big Insurance. ACA marketplace plans are not where insurers make their real money. Their profits flow increasingly from taxpayer-funded programs like Medicare Advantage and Medicaid managed care — the same universe WISeR is quietly expanding.
One proposal to “solve” the subsidy issue, endorsed by President Donald Trump and HELP Chairman Bill Cassidy, would not extend the tax credits but put $1000 to $1500 into government-sponsored health savings accounts (HSAs). HSAs can be helpful if you you have crappy insurance – or are rich and need an additional place to put your money to avoid taxes – but not a meaningful solution to the millions of Americans facing a 75% hike in premiums or finding themselves priced out of coverage altogether in 2026. The supporters of this approach claim it would somehow take money away from health insurers, but it would just reroute federal dollars to those same companies. For instance, UnitedHealth Group, which owns the nation’s biggest HSA custodian, could grab even more of our tax dollars than they already do. Meanwhile, families would still be exposed to unaffordable premiums and massive out-of-pocket costs. Champagne dreams.
Thanks to these changes in health care: The hangover on January 1, 2026, won’t only be from the previous night’s festivities – and it won’t be cured with some water and Advil. Cheers.
There’s likely to be one more round of health care votes in the House next week after the Senate votes down two rival Affordable Care Act subsidy proposals Thursday — but they won’t get any closer to extending the enhanced subsidies.
Why it matters:
Those subsidies now appear certain to expire at the end of the year, short of a last-minute breakthrough — and out-of-pocket premium costs will more than double on average for roughly 20 million ACA enrollees.
Driving the news:
The Democratic proposal that will get a Senate vote Thursday would extend the enhanced subsidies for three years, while the Senate GOP proposal would not extend the subsidies but instead provide money for health savings accounts.
Both will fail to get the needed 60 votes.
Senate Majority Leader John Thune (R-S.D.) has left the door open for further bipartisan talks after both votes fail, but there is deep skepticism in both parties that any such deal is possible.
Sen. Tim Kaine (D-Va.) said it’s possible there is “additional discussion” after the failed votes, but said the issue also might end up in a “political solution in November when people pick the side that’s for them.”
The latest:
House GOP leaders outlined a range of possible health care options on Wednesday morning, but they have little to do with the subsidies, which weren’t included in their plans.
GOP leaders will bring “consensus” bills to the floor next weekthat aim to lower health care costs, a source who attended House Republicans’ Wednesday morning conference meeting told Axios.
Those could include expanding health savings accounts and association health plans, which allow employers to band together to purchase coverage.
Overhauling pharmacy benefit managers with the goal of lowering drug costs was also discussed, along with funding ACA payments known as cost-sharing reductions (CSRs).
The intrigue:
On the House side, a bipartisan group of moderates including Reps. Brian Fitzpatrick (R-Pa.) and Jared Golden (D-Maine) filed a discharge petition, a procedural move to force a vote on a compromise extension plan.
But that effort to go around House GOP leadership faces long odds against getting the required majority of the chamber to sign on.
Modifications to the subsidies in that plan designed to win over GOP votes, like a crackdown on zero premium plans that backers say fuel fraud, could lose Democratic support due to concerns about coverage loss.
Democratic leaders havebeen focused on a clean three-year extension, saying that is the clearest way to address the issue with little time remaining to implement changes before the new coverage year starts Jan. 1.
House Democratic Leader Hakeem Jeffries (N.Y.) told reporters Wednesday he has no position on the discharge petition.
The bottom line:
There is also deep resistance to a subsidy extension among many Republicans.
Thune has said he thinks Democratic leadership is more interested in a “political messaging” vote this week than in entertaining reforms to the subsidies that Republicans point to.
Even if members in either chamber are able to make progress on a consensus compromise subsidy plan, which in theory could be attached to a government funding bill needed before Jan. 30, the divisive issue of abortion hangs over all of the discussions.
Many Republicans insist on new limits preventing the subsidies from going to insurance plans that cover abortion. Democrats say that is a dangerous expansion of safeguards that already require taxpayer funds to be segregated and not pay for abortion coverage.
Yesterday aboard Air Force One, President Trump was asked by a reporter if he supported Senators Bill Cassidy (R-LA) and Mike Crapo’s (R-IN) new health care proposal, which would authorize $1,500 deposits in Health Saving Accounts (HSAs) for lower-income individuals to replace the expiring Affordable Care Act (ACA) subsidies. The president’s response to the question was telling. And it shows just how much Big Insurance has fallen from grace in recent months.
For decades, merely expressing disenchantment with private health insurers could get you labeled as a socialist. Now we are seeing daily criticism of health insurance companies from people across the political spectrum, leading one to not know if a quote like “Americans are getting crushed by health insurance with monthly payments” is coming from a progressive, like AOC, or a conservative like MTG. (Hint: that quote was from MTG). Trump’s response was in the same vein and could lead one to believe there is a chance of the left and right finding common ground in holding insurance companies accountable for their greed.
Where Trump is right. Where Trump is wrong.
Below we will dissect the president’s response and explain where he’s right and wrong.
“I like the concept [of the Cassidy-Crapo legislation]. I don’t want to give the insurance companies any money. They’ve been ripping off the public for years.“
This is true. Big Insurance has been ripping us off for years. And almost all of insurers’ growth in recent years has come from us as taxpayers. Most big insurers now make far more money on the lucrative Medicare Advantage business and managing state Medicaid programs than from their commercial health insurance plans. And they’ve even figured out how to bilk the VA.UnitedHealthcare, the biggest insurer, now gets more than 75% of its revenues from taxpayer-funded programs. And yes, insurers are getting hundreds of billions of dollars every year from the ACA subsidies that are at the center of debate in Washington.
Here are a couple of examples. Private health insurers took in over $500 billion in tax dollars to administer Medicaid in 2023. And this year alone, they will be overpaid – yes overpaid – $85 billion as a consequence of how they’ve rigged the Medicare Advantage program.
Insurers also take in massive amounts of money in the form of premiums that people pay thinking that money goes to care. Much of that money ends up going toward things (and people) that do nothing to get us well or keep us well. Since 2014, the seven largest insurers have made over $500 billion in profits, and they used $146 billion to buy back their own stock. So yes, Trump is correct, health insurance companies have been ripping people off for years.
“Obamacare is a scam to make the insurance companies rich.”
No, Mr. President, the ACA is not a scam and most Americans now know that it has done a lot of good for a lot of people. Among other things, it made it possible for millions of people who previously had been blackballed by insurers because of a preexisting condition to finally get coverage. It brought us many long-overdue consumer protections, outlawed junk insurance, enabled young people to stay on their parents policies until they turned 26, alleviated job-lock through the creation of the ACA (Obamacare) marketplaces, and it made millions more low-income families eligible for Medicaid.
But, the president is right to say that Big Insurance has gotten rich since the passage of the ACA. Between 2014 (the year the entirety of the ACA was implemented) and 2024, just seven for-profit health insurers amassed $543.4 billion in profits and took in a staggering $10.192 trillion in revenues.
“And they have made, I mean, you look, $1,400 to $1,700 increase, 100 percent increase over the last number of years. There’s really few things that have gone up like insurance companies.”
The president is kind of right. As KFF reports, the cost of a family policy has increased 60% since 2014 – a rate of increase much higher than general inflation and also higher than medical inflation. And as we’ve published previously, not only has the total cost of an employer-sponsored plan skyrocketed, so has the share of premiums workers must pay. This year, employers deducted an average of $6,850 from their workers’ paychecks for family coverage, up from $4,823 in 2014. And keep in mind, all that money our employers are having to send to insurance companies is not money that’s available to give raises to workers or hire more people.
“They’re getting numbers and money like nobody’s ever seen before. Billions and billions of dollars is paid directly to insurance companies. We’re not going to do that anymore.”
The president is right. Several Big Insurance companies have ballooned in size over the past decade to become some of the world’s biggest corporate conglomerates. UnitedHealth Group, CVS/Aetna and Cigna are now numbers 3, 5 and 13 on the Fortune 500 list. The only American companies that take in more revenue than UnitedHealth are Walmart and Amazon.
“I believe Obamacare was set up to take care of insurance companies, not to take care of the American public.”
The president has his history wrong here. While there are plenty of Monday-morning-quarterbacking you can do for the ACA – the law was not passed to “take care of insurance companies.” While the ACA didn’t fix everything – not by a long shot – it did stop some of the insurance industry’s worst abuses, like refusing to sell policies to people with preexisting conditions – even acne – and “rescinding” policies to avoid paying for life-saving care. Some insurers were found to be paying employees bonuses to find policies to rescind, including the policies of women almost immediately after being diagnosed with breast cancer.
It prohibited health insurers from charging people more because of a preexisting condition and from dumping the sick so they could reward their shareholders more generously. Keep in mind that insurers consider every claim they pay as a loss, hence the term “medical loss ratio” (MLR), which the ACA addressed by requiring insurers to spend at least 80%-85% of our premiums on our health care.
And it’s not like Big Insurance wanted the ACA to pass. Back in 2010, America’s Health Insurance Plans (AHIP), the PR and lobbying group for health insurers, quietly funneled $100 million to the U.S. Chamber of Commerce to orchestrate a PR, advertising and lobbying blitz to keep the ACA from being passed.
While big health insurance companies have only grown since the passage of the ACA, it has been Big Insurance’s corporate maneuvers and work on Capitol Hill (not the law itself) that has allowed these companies to flout some of the ACA’s regulations and bend the law to do their will.
“I love the idea of money going directly to the people, not to the insurance companies. Going directly to the people. It could be in the health savings account. It could be a number of different ways.”
While that is a compelling sound bite, it’s disingenuous. The money proposed by Cassidy and Crapo to go to HSAs would then be used by enrollees to buy insurance, thus still giving money to the insurance companies. Even worse, the proposed amount of money to go to people’s HSAs to help them pay for health insurance and care is $1,000-$1,500. This is money that would be used to purchase a bronze or copper plan with a high deductible (with many of those plans having deductibles north of $5,000). That means under this plan people would still need to come up with thousands to meet their deductible on top of paying their premiums every month. $1,000 wouldn’t come close to even covering the premiums for a decent policy, much less the out-of-pocket costs.
Replacing ACA subsidies with HSAs would still keep Americans tied to the same private health insurers that Trump calls “big, bad” and “money-sucking.”Most families would still be exposed to crippling medical bills, and even more tax dollars would flow to insurance conglomerates that own HSA custodian businesses (like UnitedHealth’s Optum Bank).
“And the people go out and buy their own insurance, which can be really much better health insurance, health care.”
That’s wishful thinking far removed from reality. The health insurance plans available to people who get money for their HSAs under the Cassidy-Crapo proposal – rather than getting subsidies – are the same as those currently available. Worse, without the subsidies, people will not be able to afford the gold or silver plans that have lower out-of-pocket costs. In reality the plans that people buy under the proposed Cassidy-Crapo plan would have less value than the plans they previously bought with subsidies.
Trump’s comments are coming ahead of tomorrow’s scheduled vote in the Senate on dueling Democratic and Republican proposals to deal with the enhanced subsidies for ACA plans that will expire in three weeks. Without those subsidies, premiums will spike for many of the 24 million American enrolled in “Obamacare” plans. Democrats want to extend the subsidies for three years. Republicans, led by Senate Majority Leader John Thune, will push a plan replacing those subsidies with direct payments into individuals’ Health Savings Accounts (HSAs), as the president is suggesting. Neither plan is expected to get the 60 votes required for passage. What happens next is anybody’s guess.
HENRY KOTULA 