Sticker shock is coming for hundreds of thousands of insurance customers in Pennsylvania.
Small business owners, gig workers and other Pennsylvanians who buy health insurance through the Affordable Care Act marketplace will see premiums rise on average by nearly 22% for coverage next year, state officials announced Tuesday after issuing final approvals.
Individual and small group rates will vary depending on the insurance company, specific plan, where someone lives and their income, but state insurance regulators say some of the market’s current 496,000 customers will still see prices that are “shocking.”
The spike in costs is being driven, in part, by the fact that Congress hasn’t extended enhanced tax credits that currently help people afford their monthly premiums, Pennsylvania leaders and insurance companies said.
The credits were passed in 2021 as part of COVID-19 relief funding, and are set to expire at the end of the year. The additional cost could cause people to drop coverage altogether next year if it becomes too expensive.
Democrats and Republicans remain deadlocked over future funding for those federal health subsidies, a main sticking point in government shutdown debates. Meanwhile, annual open enrollment for ACA marketplaces like Pennie in Pennsylvania begins in less than three weeks on Nov. 1.
“Congress still has the ability to act to protect Pennsylvania families, as well families across the country,” Pennsylvania Insurance Commissioner Michael Humphreys stated in a press release, but added that people will need to carefully shop for plans this year that they can best afford without counting on the boosted tax credits.
Pennsylvania residents calculate affordability for future coverage
Many people will still be eligible for some amount of tax credits that will go toward lowering their monthly premiums, but the loss of additional enhanced credits that were passed during the COVID-19 pandemic could put insurance coverage out of reach for some Pennsylvanians.
The loss of health subsidies combined with premium increases for 2026 will disproportionately affect people in rural areas, older residents who aren’t yet eligible for Medicare and working middle-class earners, according to estimates at Pennie.
Havertown resident Lauri Cumming said she and her husband, both 60, are living this reality. She works part-time as a realtor and part-time as a bookkeeper at a local church. Her husband is self-employed as a contractor in construction.
The couple currently pays about $1,000 a month in premiums for their ACA health insurance. Without health subsidies and financial assistance, Cumming said it would cost them about $1,900 a month. That doesn’t factor in the new premium hikes for 2026.
“I’m afraid to look at next year,” she said. “It’s scary and I don’t know what we’re going to do … We went through all the scenarios. It’s not feasible to sell my house.”
They’ve gone without health insurance before, especially when premium costs were too high, Cumming said. But that was over 15 years ago.
“I didn’t go to the doctor until I was so sick,” she said. “But thank God, I was young and I didn’t have any problems.”
That’s not an option now, Cumming said, as she and her husband recently became cancer survivors and are expected to have follow-up appointments and testing over the next several years “to make sure nothing changes.”
For small business owners like Andrea Deutsch, the price hikes and loss of financial assistance could mean choosing between keeping her pet supply store open or having health insurance to manage Type 1 diabetes and other conditions.
Deutsch, who is also the mayor of Narberth, pays about $700 a month for her insurance plan after tax credits, but estimates that she would have to pay more than $1,400 a month next year for the same plan.
“I already live a very modest lifestyle. I will have less to put back into my shop and will likely start going through what I’ve put for any future retirement,” she said. “If rates go high enough, I won’t have a choice. I’ll have to close my business and hopefully pick up a job working for anyone who can cover me under a group plan — that’s if there is even a job available for me to have because so many people will be doing the same.”
Shopping the ACA marketplace this year with ‘uncertainty’
Pennie specialists say people should still review and shop for plans during this year’s open enrollment period, which runs from Nov. 1 through Dec. 15, despite the uncertainty in the marketplace this year.
If Congress were to extend enhanced tax credits soon, it would “immediately reduce insurance rates by 3% – 5%” across Pennie individual and group plans, but Pennsylvania Department of Health officials said time is running out.
In addition to the potential loss of health subsidies, insurance companies said they were seeking premium increases to also account for other market conditions: the rising costs of health care broadly, higher use of benefits for more expensive outpatient services and medications and a larger share of sicker enrollees with chronic conditions.
The Pennsylvania Insurance Department “blocked a number of excessive increases that insurers requested” to a sum of $50.1 million, Humphreys said. But some insurers will raise premiums as much as 38% in the individual market and 22% in the small group market.
