Why Did My Health Insurance Premium Increase, and What Should I Do?
Many Americans with health insurance are likely to see their premiums increase next year. According to recent data, the median premium for marketplace plans is projected to rise by 7 percent next year, with some plan prices increasing by as much as 51 percent. With costs on the rise, it's more important than ever to re-shop your health insurance plan annually. Even if you’re currently covered, re-evaluating your options during Open Enrollment could help you find a plan that better suits your budget and needs, potentially saving you money while ensuring you have the right coverage.
The cost of your health insurance could rise by as much as 51 percent next year.
- Peterson-KFF Health Systems Tracker
What is my premium, anyway?
Your health insurance premium is the monthly cost of your health insurance plan, and it remains the same regardless of whether you use your plan or not. Premium prices vary among metal tiers — generally, the more you pay for your plan each month, the more care it will cover when you seek medical services.
Since the Affordable Care Act became law, health insurance companies cannot charge you more based on your health status or medical history. Premiums are set based on the projected medical costs of the insured group as a whole (everyone buying the same plan as you), a concept known as risk pooling. This allows insurance companies to spread high health care costs over a large number of people.
Why is my premium increasing this year?
Here’s a breakdown of why your health insurance premium is increasing in the coming year:
1. Inflation
Insurers are raising premiums due to increased medical costs as a result of inflation. In 2025, the rising prices of health care services and medications are expected to be the main contributors to premium increases, with medical inflation now outpacing general economic inflation.
2. Hospital mergers and staff shortages
The consolidation of hospitals and ongoing workforce shortages are also contributing to higher health insurance premiums in 2025. Insurers are being forced to pay more as large hospital systems and providers demand higher rates, and staffing challenges add to the cost pressures.
3. Specialty drugs
The growing use of expensive drugs, particularly for weight loss and new specialty treatments, is driving up prescription drug spending. This trend is a significant factor behind premium increases, as insurers brace for higher costs associated with these medications.
What should you do about premium increases?
If you currently have health insurance, it's important to re-evaluate your coverage during this Open Enrollment Period. Even if your coverage was perfect last year, changes in the health care market (and your own needs!) mean that re-shopping could save you money and find more suitable coverage for the coming year.
Indeed, many insurers are adjusting their rates significantly for 2025, so the plan that was affordable last year may see a substantial increase in premiums this year. By exploring new options, you might find a plan that better fits your budget while still providing the necessary coverage. Additionally, re-shopping allows you to take advantage of any new plan features or benefits that have become available, such as better networks or improved prescription drug coverage.
Remember, health insurance isn’t just about avoiding penalties or meeting minimum requirements — it’s about making sure you have access to the care you need without overpaying. Don't leave money on the table by sticking with a plan that requires you to pay more than necessary or no longer meets your needs. Instead, use this opportunity to find a better plan that offers both affordability and peace of mind.
Stride can help you re-shop with ease. Enter your ZIP code below to get started and see your personalized plan recommendations for 2025 in less than five minutes.
