Brace yourself for skyrocketing health insurance costs this year. Here’s who’ll take the biggest hit and how to soften the blow

Since 2021, the majority of them have received pandemic-era tax credits that reduce their insurance premiums.

Those subsidies have been a lifeline for freelancers, gig workers and small business owners — representing nearly half of the enrollees in the program. They've also been a boon to early retirees who don't qualify for Medicare (1).

"This made it easier to get (health) insurance and importantly freed workers to start new businesses without fear of becoming uninsured," MIT economics professor Jonathan Gruber told Newsweek (2).

But that’s all changing. The tax credits expire at the end of 2025, and President Donald Trump has made no move to extend them.

Gruber adds that the end of the tax credits is triggering a surge in health insurance costs across the board, with insurers planning to raise premiums by upwards of 18%. This in turn will raise the cost of government health insurance plans.

In other words, the end of the tax credits will impact anyone who needs health insurance. Here’s why.

How rising health care premiums affect us all

Insurers know that the end of the subsidies will mean some ACA Marketplace policyholders — particularly small business owners, self-employed individuals and retirees who are too young to qualify for Medicare — will drop their insurance altogether.

As Joseph Newhouse, a professor of health policy and management at Harvard University, told Newsweek, others may move to less generous plans with lower premiums.

When healthier people drop or downgrade coverage, premiums rise for everyone left behind. Insurers have already priced that in, which is why they’re poised to raise premiums by 18%.

As if rising premiums weren’t enough, the Consumer Financial Protection Bureau (CFPB) just issued guidance suggesting that states can’t block medical debt from appearing on credit reports, according to the National Consumer Law Center (3).

State laws currently prohibit this kind of information from appearing on credit reports. While the CFPB’s guidance is not legally binding, it could still influence courts.

Chi Chi Wu of the National Consumer Law Center said this is a brutal move just as the tax credits are set to expire. He said people will not only pay more out of pocket for health care, but their credit scores will be compromised.

“Trump’s CFPB is doubling down on the harm, seeking to allow this medical debt to ruin people’s financial report cards and make it harder for them to get credit, rental housing, and jobs,” he said.

What to do before prices jump

If you’re worried about health care costs, you’re not alone. More than half of the respondents to a recent AP/National Opinion Research Center poll are “extremely” worried about health care costs (4).

Here are some ways you can prepare for higher rates in 2026:

Compare plans early. During open enrollment, don’t just auto-renew, try shopping around. The KFF Marketplace Calculator can help estimate what you’ll pay with or without subsidies.

Run the numbers on income thresholds. If your household income is near 400% of the federal poverty level, try to estimate next year’s earnings carefully because even small shifts can change your eligibility for assistance.

Plan for out-of-pocket spikes. Rising premiums often go hand-in-hand with higher deductibles. Prepare for it by building a small health emergency fund now since this could help prevent a bigger financial strain later (5).