A new analysis by the Kaiser Family Foundation (KFF) says small businesses with Affordable Care Act (ACA)-compliant health plans may face a median premium increase of 11% for 2026. This forecast is higher than previous estimates by PwC and other insurance industry analysts who are estimating an increase of 6.5% to 9% in health insurance costs for 2026. The KFF numbers are based on preliminary rate filings from more than 300 insurers across all 50 states and the District of Columbia (D.C.).
 
For 16 states and D.C., a 12% median proposed rate increase is based on rising health care costs, including higher prices for hospital care, physician services, and prescription drugs. Some insurers in the KFF analysis also cited broader inflation, labor shortages, uncertainty about tariff-driven cost increases, costs for specialty drug like GLP-1s (like Ozempic and Wegovy), anticipated lower enrollment numbers, and worsening risk pools for smaller group health plans.
 
For the 318 small group market insurers offering ACA-compliant health coverage in 2026, premium changes range from a decrease of five percent to an increase of one-third (32%). Most insurers (216 or more than two-thirds of those reviewed) are requesting an increase in costs of 5-15%. Thirty-one insurers are seeking increases of 20% or more. Three insurers have requested rate decreases for 2026.
 
On the issue of tariffs, 23 insurers specifically call out the uncertainty of higher prescription drug costs as a consideration in setting their rates for 2026. The Trump administration announced a few days ago that starting October 1, the U.S. will impose a 100% tariff on any branded or patented pharmaceutical products unless firms build production facilities domestically. These are drugs that are protected and for which there is no generic equivalent until their patents or other intellectual property rights expire. The president said the exemption would apply to projects where construction has started, including sites that have broken ground or are under construction. Eli Lilly, Johnson & Johnson, AbbeVie, and others have been identified as potential beneficiaries of the exemption.
 
According to information from the United Nations Comtrade Database, U.S. imports of pharmaceuticals have tripled in recent years. They were up in 2024 to around $213 billion as compared to a decade earlier.
 
For individuals who get their ACA coverage through a federal or state marketplace (like Covered California or Nevada Health Link), premium payments could spike significantly in 2026. If the U.S. Congress allows the enhanced premium tax credits to expire at year-end, ACA marketplace enrollees will see their out-of-pocket premium payments rise by 114%. The average will climb from an average of $888 in 2025 to $1,904 in 2026, according to KFF’s analysis.