Key insights
- Rising ACA premiums, driven by the expiration of pandemic-era subsidies, are squeezing household budgets. A KFF survey reveals that 80% of ACA enrollees face higher healthcare costs, leading to concerns about affording care and potential cutbacks in consumer spending. This could negatively impact discretionary spending and overall economic growth, posing a slight headwind for US equities.
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The long-feared Affordable Care Act premium hikes are starting to squeeze household budgets.
That's according to a survey from the health research organization KFF, which found that among people re-enrolling in an ACA plan in 2026, 80% had higher premiums, deductibles, coinsurance, or copays than last year. More than half said their costs were "a lot" higher.
The surge in health care premiums could hurt consumer spending by diverting household budgets.
The survey showed the impact of the expiration of a pandemic-era federal subsidy that had pushed down costs for many enrollees. Congress allowed the tax credit to expire this year after Democrats tried unsuccessfully to extend it, and an alternative Republican plan to contain health care costs never materialized.
Before the credit expired, KFF estimated people's insurance premiums would double on average.
The cost increases are having serious effects on the financial situation of ACA enrollees, the survey found.
Among the 1,117 people surveyed, 73% said they were worried about affording the costs of emergency care or hospitalizations; 49% worried about affording routine medical care; and 45% worried about paying for prescription drugs.
As a result of those concerns, 55% said they are, or will be, cutting back on household spending to afford health care costs, and 17% said they weren't confident they would be able to afford their premium this year.