While millions enrolled in Obamacare face prices being jacked up in 2026 because of expired subsidies, those Americans who get their health plans through their employer are also about to face steep price hikes, according to experts.
A key sticking point in the recent negotiations to reopen the government and end the record-breaking shutdown was whether to extend Covid-era subsidies and tax credits that applied to nearly all of the roughly 24 million people buying insurance on the Obamacare marketplaces. The deal to reopen the government will let those add-ons lapse at the end of the year, potentially jacking up prices by $1,000 or more for such Affordable Care Act plans.
Now, a separate group of roughly 165 million people with health care through their jobs also face a punitive price surge.
Thanks to trends like inflation, uncertainty over tariffs, health care company consolidation, and the expansion in coverage for costly treatments like GLP-1 weight loss drugs, employers expect to spend 6.7 percent more per employee in 2026, the highest jump in 15 years, according to a survey of employer-sponsored health providers from Mercer. Those costs will inevitably get passed on to workers.
In 2026, the median proposed premium increase could be 11 percent among small group insurers, the Peterson-KHH Health System Tracker found.
Beyond higher premiums, workers could “see an increase in the cost-sharing provisions in the design as well — higher co-pays, higher deductibles — so it’s getting hit on both ends,” Beth Umland, director of research for health and benefits at Mercer, told CBS News.
These price hikes are expected to outpace both inflation and employee pay increases, further squeezing families.
As midterms loom and voters are increasingly focused on affordability, Republicans in Congress are racing to find a solution to these expected price problems.
Following the lead of President Trump, who outlined a loose vision for “Trumpcare” earlier this month, Sen. Bill Cassidy has proposed taking some of the funds that would’ve been spent on the ACA subsidies and putting them into health savings accounts for qualifying Americans.
Senate Democrats have blasted the proposal as insufficient to meet rising health costs.
“Republicans refuse to help Americans lower their premiums,” Sen. Ron Wyden said in a statement yesterday. “Half-baked ideas that put more taxpayer dollars into health tax accounts will enrich big banks and insurance companies while saddling Americans with high premiums and deductibles.”
Unusually for Republicans, who have typically remained united on health care, which has largely meant trying to overturn Obamacare for a decade, the health care issue has now begun to divide members of the GOP from each other.
Rep. Marjorie Taylor Greene, one of the most conservative people in Congress, sided with Democrats during the shutdown in calling for the ACA subsidies to remain.
This issue was one of a few key flashpoints that led to her spectacular recent public falling out with Donald Trump, after years of being one of his key allies on the Hill.
