Residents of Philadelphia and surrounding counties are facing significant increases in health insurance premiums as the Pennsylvania Insurance Department announced rates expected to take effect in 2026. With the anticipated expiration of a critical financial incentive program, Philadelphia customers who purchase Obamacare health insurance through the state’s marketplace, Pennie, will see their average monthly costs more than double—a staggering 102% increase across Pennsylvania.
Philadelphia’s neighboring counties will experience varied rate hikes, with Chester County projected to see a 46% increase, while Delaware County faces an even steeper rise of 70%. However, the most severe consequences will hit rural areas, where residents are likely to lose more in tax credits compared to their urban counterparts. Notably, Juniata County will see the highest premium increase, with residents expected to pay an average of 485% more in 2026.
These increases are primarily attributed to Congress’s failure to renew a vital financial incentive program, which is set to expire at the year’s end. Insurance administrators have stressed the urgency of approving these rate increases and notifying consumers by mid-October, allowing adequate time for individuals to reassess their coverage options before the upcoming enrollment period begins on November 1.
The proposed tax credit changes have become a contentious issue in federal budget discussions, contributing to the current government shutdown. Democrats are advocating for a permanent extension of enhanced subsidies, while Republicans have resisted, suggesting they would tackle the matter separately.
Advocates for health coverage have labeled the projected premium hikes as “staggering,” emphasizing the significant burden these increases place on families reliant on Pennie for their healthcare. Antoinette Kraus, executive director of the Pennsylvania Health Access Network, pointed out that Pennie serves individuals without employer-sponsored insurance who make too much to qualify for Medicaid. She expressed concern that many individuals could opt to abandon their current plans due to unaffordability, with estimates indicating that approximately 150,000 of the 500,000 Pennie customers this year may drop their coverage.
For some, the dire financial implications may force them to choose cheaper plans with reduced benefits or compromise their healthcare needs by rationing medications or skipping appointments. Kraus underscored the potential dangers this poses, particularly for those managing chronic conditions like cancer or diabetes, where the difference between receiving critical treatment and going without care can be life-altering.
Under the Affordable Care Act (ACA), individuals earning below 400% of the federal poverty level—approximately $60,000—are eligible for tax credits to help mitigate premium costs. While the basic tax credit remains intact, the imminent end of enhanced subsidies could significantly reduce the financial assistance available to many current beneficiaries, with about 90% of Pennie customers for the year qualifying for some form of credit.
If the federal government renews these critical tax credits before the deadline, Pennie has indicated it would work to promptly update its rates. However, advocates worry that the damage may already be done, with many potential customers unlikely to return if they abandon their plans in search of more affordable options.
