Health insurers offering plans on the Affordable Care Act (ACA) marketplace are requesting the biggest premium increases in over five years—and if you buy your own health insurance, this could mean higher costs in 2025.
A new analysis by KFF finds that insurers are proposing an average rate increase of 6% across 2025 plans, with some companies asking for double-digit hikes. This marks the sharpest jump since at least 2020.
Why the Big Increases?
Insurers are pointing to a few major cost drivers:
- Rising Prescription Drug Costs: Specialty drugs and weight-loss medications like GLP-1s (Ozempic, Wegovy) are pushing up expenses for insurers.
- Increased Use of Healthcare Services: People are going to the doctor and hospital more often now than they did during the pandemic. That means more claims and higher costs.
- Medical Inflation: The general cost of healthcare services continues to rise, from hospital stays to outpatient procedures and imaging.
What This Means for You
If these proposed rate hikes are approved by state regulators, people buying individual plans on the marketplace could see noticeably higher monthly premiums during open enrollment this fall.
However, it’s important to remember:
- Most enrollees receive subsidies. If you qualify for premium tax credits, your out-of-pocket premium might not go up by much—if at all.
- Shopping matters. Plan prices vary widely by carrier and network. Comparing options during open enrollment (starting November 1) can help you find the best value.
- Employer plans may be next. While this report focuses on individual plans, many of the same cost pressures are likely to affect group health insurance renewals later this year.
Final Thoughts
Healthcare costs are on the rise again, and insurers are adjusting their prices to keep up. Whether you get your insurance through the individual market or a small group plan, it’s smart to start preparing now.
At Eriksen Insurance, we help individuals, families, and small businesses navigate these changes and stay covered with the most cost-effective plans available. If you’re concerned about your 2025 premiums—or want to understand your options before open enrollment—reach out to us now. We’ll walk you through it.