Obamacare Premiums Are Expected to Surge—and Canadians Should Pay Attention
Recent filings show U.S. health insurers are requesting the largest premium hikes for Affordable Care Act (ACA) plans—the marketplace commonly known as “Obamacare”—since 2018. With many Canadians living in the U.S. relying on ACA coverage as their primary healthcare option, these increases could significantly affect their costs and coverage.
What’s Driving the Premium Spike?
- Largest Rate Hikes Since 2018
Based on filings from 105 insurers across 19 states, the median requested increase for 2026 is 15%, with some plans in Illinois and Texas seeking increases of over 20%.
This marks the most substantial annual jump in ACA premiums in over seven years. - Expiration of Enhanced Premium Tax Credits
Pandemic-era subsidies—introduced in 2021—are set to expire at the end of 2025. Without them, insurers estimate premiums could increase by approximately 4%, on top of the 15% hike. - Rising Underlying Healthcare Costs
Medical inflation, provider labor pressures, and costly prescription drugs, especially GLP-1 diabetes and weight-loss medications, are pushing underlying costs up around 8% annually. - Tariffs, Regulatory Shifts, and Adverse Enrollment Trends
New tariffs on medical supplies and implementation of ACA Integrity Rules (which tighten eligibility checks) have added financial pressure. Furthermore, healthier individuals may drop coverage, leaving a sicker, and more expensive, risk pool.
Why This Matters to Canadians in the U.S.
No Universal Coverage Without ACA
Non-elderly Canadians living in the U.S. cannot access Medicare and may not qualify for Medicaid. Medicare begins at age 65 but Canadians who have not worked in the U.S. for at least 10 years (or their spouse) do not qualify. Affordable Care Act plans are guaranteed-issue and there is no age limit. All other private health insurance options require underwriting and exclude most preexisting conditions. Although expensive, Obamacare allowed Canadians who have preexisting conditions or do not qualify for Medicare to move to the U.S. with a health insurance options when they otherwise would not have had one.
- Limited Private Alternatives
Faith-based cost-sharing programs, indemnity policies, and private insurers require underwriting. They can be expensive or unavailable for some, especially for individuals with preexisting conditions. - Coverage Will Become Costlier
Without renewal of subsidies, out-of-pocket premiums could surge more than 75% for middle-income consumers, making ACA plans less viable.
Broader Impact and Outlook
- Rising Uninsurance Rates
Analysts predict millions could lose coverage as premiums climb and affordability declines. - Political and Legal Battles Ahead
With new ACA restrictions and subsidy expirations tied to broader budget and healthcare policy legislation, congressional action or state-level lawsuits may attempt to reverse or soften the rate hikes.
Planning Tips for Affected Canadians
- Budget for higher premiums: Expect full-cost ACA plans to increase by 15%–20% in 2026, and possibly more if subsidies lapse.
- Explore subsidy eligibility: Even middle-income households may qualify for ACA subsidies if thresholds are extended.
- Compare alternatives: Investigate cost-sharing, private issue, or indemnity plans—but understand underwriting limits and potential exclusions and rejections.
- Advocate locally: State regulators can still reject insurer rate filings; public comment might influence approval processes.
- Connect with cross-border experts: Advisors like those at 49th Parallel Wealth Management can model scenarios and identify optimal insurance solutions based on your residency, income, and health profile.
ACA premium increases are reaching heights not seen since 2018. For Canadians residing in the U.S., this isn’t just a healthcare story, it’s a financial one. Staying informed, evaluating coverage options, and proactive planning are essential to maintaining both access and affordability.
