Common ACA premiums may rise by greater than 20% in Texas

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Health insurance coverage corporations have requested a median premium improve of 24% for Affordable Care Act plans in Texas in 2026, a major hike that might result in destabilization within the market and clients choosing much less or no protection.

Last yr, the typical charge hike throughout insurance coverage carriers was 3.8%. Data evaluation from KFF found that subsequent yr’s charge hikes may very well be the biggest improve since 2018, when common premiums went up by 35% in Texas. In 2018, corporations factored in Congress’ makes an attempt to repeal the Affordable Care Act and President Donald Trump signing an govt order ending subsidies to insurers for low-income folks. After 2018, common premiums in Texas have by no means risen by greater than 4%.

Nearly 4 million Texans purchased medical health insurance protection by means of the ACA market for 2025, a high-water mark in a state that has the best uninsured charge within the nation. ACA uptake has tripled since 2020, after Congress expanded tax credit to decrease ACA customers’ month-to-month premiums.

The affect of the tax credit score growth will be noticed in quite a lot of well being care developments in Texas. Enrollment has tripled from 1.3 million in 2021, when the credit have been expanded, to almost 4 million in 2025. The common post-subsidy month-to-month premium that Texans enrolled within the ACA pay fell from $136 in 2018 to a low of $50 in 2024. The uninsured charge, whereas nonetheless the best within the nation, has declined from 23% in 2012 to 16.3% in 2023.

And Texans now have an even bigger number of plans to select from, with the variety of insurers working within the ACA particular person market growing from eight in 2020 to fifteen at this time.

The expanded market signifies that insurers should compete for purchasers on value. In 2018, in line with knowledge from the Texas Association of Health Plans, 98 counties solely had one insurer, and simply 5 had not less than 4 choices. Today, that development has reversed. There are 114 counties the place Texans can select between not less than 4 medical health insurance corporations and solely seven — all close to the Oklahoma border — which have only one.

But these features may very well be imperiled by the expiration of the tax credit on the finish of the yr and different elements insurers have cited of their proposed charge filings, together with rising well being care prices and elevated utilization of medical providers.

“This is kind of a perfect storm,” stated Blake Hutson, the vp of public affairs on the Texas Association of Health Plans. “You’ve received growing medical prices, the expiration of the tax credit, after which you find yourself with a a lot much less wholesome threat pool. We’re actually frightened in regards to the affect on Texans that purchase protection on their very own.”

Ripple results of federal cuts

The premium tax credit, which have been expanded by Democrats within the 2021 American Rescue Plan Act and once more within the 2022 Inflation Reduction Act, are claimed by 83% of Texans who get medical health insurance by means of the ACA. These tax credit function on a sliding scale based mostly on earnings to offset the price of premiums and are paid on to insurers. Premiums are capped at 8.5% of month-to-month earnings, and eligibility for the tax credit was expanded to folks incomes over 400% of the federal poverty degree, lots of whom are older adults or small enterprise homeowners. As earnings goes down, the scale of the tax credit score goes up. With extra wholesome folks in a position to afford protection, medical health insurance corporations are in a position to drive down premiums.

In Texas, 58% of ACA enrollees have a month-to-month premium of below $10.

But these tax credit are set to run out on the finish of the yr, making any Texan who earns over $62,600 a yr ineligible for the subsidy and ending the extra subsidies which have allowed Texans incomes lower than 150% of the federal poverty degree — $23,475 for people — to pay little to no month-to-month premium.

Insurers setting premium charges for 2026 are anticipating the tax credit to run out and subsequently requesting greater charges. Congress may nonetheless attain a deal to protect the improved premium tax credit, which expire on the finish of 2025. But premium charges are usually finalized in late summer season forward of the beginning of open enrollment on Nov. 1, which means time is operating out to avert charge hikes in 2026.

Texans’ month-to-month premium prices will doubtless rise even greater than the 24% common charge hike, given the looming expiration of the expanded tax credit. Health coverage group KFF tasks that Texans who use ACA tax credit will see premiums rise by a median of 115% or $456 per yr.

North Texas insurance coverage dealer Michelle McLaren stated the ACA insurance coverage market had stabilized lately, with premiums growing at comparatively acceptable charges. But the 2026 charge filings mark a definite change and portend an increase in Texas’ uninsured charge and a possible contraction of the ACA market.

“It’s going to hit those that are in rural areas, lower income and elderly,” McLaren stated.

Health care analysts are frightened that {the marketplace} will shrink if subsidies are allowed to run out. In 2016, when the pool of ACA enrollees was sicker than the typical public, premiums went up and quite a few insurers left the market, leaving Texans, particularly in rural areas the place populations are usually older and sicker and the payer combine contains much less folks with non-public insurance coverage, with fewer decisions.

With wholesome Texans projected to depart {the marketplace} if premiums rise, the cycle may repeat.

Currently, the typical month-to-month premium for Texans who get well being care protection by means of the ACA — after credit — is $57. The common benchmark — or second-lowest-cost silver plan — month-to-month premium price in whole is $489 in Texas.

To regulate premium hikes, insurance coverage corporations are required by federal regulation to spend not less than 80% of premiums they gather on medical prices and high quality enchancment efforts for particular person plans. If their loss ratio is available in beneath 80%, corporations should pay the distinction again to enrollees as rebates. Using actuarial evaluation, carriers can suggest adjustments to their premium charges, and the Texas Department of Insurance opinions filings to ensure they’re compliant with the regulation.

The anticipated affect to varied plans

BlueCrossBlueShield, the biggest insurer in Texas and the one firm to supply ACA plans in all 254 counties, has requested a median charge hike of 39% for particular person plans, among the many highest will increase of the 17 insurers which have submitted charge requests. In its filing, the corporate, which insures practically 1.1 million Texans by means of particular person ACA plans, stated charge will increase will vary from 9% to 65%.

“Blue Cross Blue Shield of Texas remains steadfast in its commitment to a stable health insurance market with competitive plan choices in the individual market, as we have since the inception of the ACA,” a spokesperson for the corporate stated. “The proposed rates for 2026 coverage include both new and current individual ACA-compliant plans and reflect industry-wide changes to the market, including the anticipated expiration of enhanced premium tax credits at the end of 2025.”

Each particular person’s precise premium charge improve, no matter provider, shall be decided by the plan they choose and their area.

BCBS cited projected will increase in medical service and prescription drug prices because the impetus for charging greater premiums. The firm had initially requested a rise of 21%, however refiled with a better charge improve — which has the trade frightened about policyholders downgrading or dropping protection.

“It doesn’t look like Blue Cross is really going to be in the picture, which would be very difficult in Texas, as they’re still the only carrier that’s in every single county,” McLaren stated. “They may have gone up too much.”

Last yr, BCBS solely raised charges by a median of 6.6%, and a few people even noticed their premium lower. The firm initially requested in 2024 to carry premiums regular.

United Healthcare, which insures over 580,000 Texans by means of the ACA, requested a 23% common improve for 2026.

UHC explicitly cited the expiration of the improved premium tax credit in its filing requesting a premium charge improve. Other justifications embody greater reimbursement charges to suppliers, extra frequent medical visits and suppliers utilizing new costly expertise.

The firm’s 2025 charge improve was 8.9%.

Younger, more healthy Texans who get protection by means of the ACA are anticipated to hunt out supplemental insurance coverage or various plans which have restricted advantages if the improved tax credit are allowed to run out. In its submitting, UHC explicitly priced in anticipated protection loss from the expiration of the tax credit. If medical health insurance is prohibitively costly, wholesome persons are the likeliest to drop their protection — elevating the general threat of the remaining pool and inflicting insurers to boost premiums.

Some of the state’s different massive insurers are requesting the biggest charge hike. Celtic Insurance Company is proposing a median 41% premium improve for the over 487,000 Texans the corporate insurers.

Superior HealthPlan, which covers 475,000 Texans by means of its ACA plans, additionally cited the expiration of the tax credit and the ensuing assumption that morbidity will rise among the many remaining threat pool in its filing. Superior is requesting a 36% common charge improve. Based on regional actuarial variations, premiums will rise extra sharply amongst Superior clients in Houston, which has a median improve of 37%, than in Austin, which is 30%.

Last yr, Celtic decreased premiums by 3.2% and Superior solely raised premiums by a median of 1.1%.

Beyond the expiration of the tax credit, McLaren stated tariffs are additionally contributing to rising medical prices and subsequently greater premiums.

“Medical costs are increasing because a lot of medical supplies are shipped from overseas, so tariffs are going to increase premiums,” McLaren stated. “The uncertainty increases premiums.”

Disclosure: Blue Cross Blue Shield of Texas, Texas Association of Health Plans and United Healthcare have been monetary supporters of The Texas Tribune, a nonprofit, nonpartisan information group that’s funded partially by donations from members, foundations and company sponsors. Financial supporters play no function within the Tribune’s journalism. Find an entire checklist of them right here.

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