By Joanne Bump
2026 Social Security (SS) Cost of Living Adjustment (COLA) – The updated COLA was announced on October 24, with over a weekdelay due to the federal government shutdown. The actual COLA provides a 2.8 percent increase beginning this January. The estimate is based on inflation data, providing an average monthly increase of about $56 to 71 million Americans. Over the last ten years, the COLA increase has averaged about 3.1 percent which hasn’t kept up with the high cost of living for seniors. It questions whether the current formula accurately reflects the inflation experienced by retirees. The Senior Citizens League has proposed changing the measure of SS inflation to the Consumer Price Index (CPI) for the Elderly (CPI-E), placing greater emphasis on what seniors spend more on, like medical care and housing.
Affordable Care Act (ACA) Premium Increase Wipes Out Income Tax Cuts – An analysis conducted by Americans for Tax Fairness, based on data from the Institute on Taxation & Economic Policy and Center on Budget Policy Priorities, finds that for tens of millions of working families the small benefit of the Trump tax cut would be offset by increased health insurance costs. See the “Monthly Premiums for Individuals Earning $65,000” chart at the end of this article. This August 25 report compares the benefit to the ACA new insurance premium increases. The One Big Beautiful Bill Act (OBBBA) overpoweringly favors the wealthy, with households making over a million dollars in 2027 due to get a tax cut that year of nearly $100,000 on average. In contrast, a median income family is projected to get a federal income tax cut of $1,500 next year. A single 45-year-old earning $62,000 would pay $1,470 in higher health insurance premiums due to the ending of the ACA tax credits, on average, eliminating any benefit.
Priced Out of Affordable Health Insurance – The OBBBA made significant reductions to the federally subsidized health insurance programs to pay for the continuation of $4.5 trillion of federal tax cuts, primarily for the super wealthy. These major budget reductions to American’s health care insurance system include Medicaid, Medicare, and the ACA health insurance plans. The share of the cost of the 2026 ACA annual insurance premiums, paid by enrollees, is expected to go up by 75 percent or more, as federal support would revert back to the ACA original lower levels, even though the health insurers are requesting a median cost increase of 18 percent. Many are in disbelief when hearing of the huge 75 percent rate increase.
According to an August 6, 2025, Kaiser Family Foundation (KFF) analysis, health care insurers expect that healthier members will leave the ACA when federal subsidies are cut back and the enrollee out-of-pocket premium payments become unaffordable. The remaining enrollee base will be less healthy and more expensive, on average. Insurers estimate that rates will rise by an additional four percentage points as a result.
High Cost of ACA Premiums – According to an October 30 New York Times article, based on the KFF research, most people who have purchased their own health insurance from the ACA don’t pay the full price. Tax credits created by the original ACA made the insurance “affordable.” The new premium prices reflect the price increases for the extra tax subsidies, called “premium” tax credits, that were passed in 2021, renewed in 2022, and will expire at the end of 2025. If extended, these tax credits would cost an estimated $23 billion next year and $350 billion over the next decade according to the Congressional Budget Office.
KFF Descriptions – Descriptions are listed below by earning categories and summarize the most important factors influencing the scale of the new premium increases based on where people live, their age, and what they earn.
- Earn Less than $24,000 –For those individuals with no cost premiums for their health insurance, that would stop. Currently, with the federal premium subsidies, enrollees who earn less than $24,000 a year don’t pay for their health insurance premiums. However, to use the health insurance, they pay co-payments and deductibles. For example, individuals earning $22,000 yearly will pay $66 a month for a typical plan after the subsidies expire. This amount may appear to be a small increase, but could be unaffordable for a family of four, living on about $1,800 a month. About half of all ACA market places nationwide will see increases in this range. For those near the poverty line in states that didn’t expand their Medicaid Program, their insurance will remain heavily subsidized at the lower incomes, as provided by the original ACA.
- $35,000 Earner – The new monthly premium for individuals earning $35,000 yearly more than doubled, rising from $86 to $218, up $132 monthly. Around 40 percent of enrollees earn between $24,000 and $63,000 and will see this level of increase.
- $65,000 Earner – For higher earners who received subsidies, age was the most important factor in increased price. The subsidies kick in only when the cost of insurance is more than 8.5 percent of their income, coming up in the most expensive markets. In addition, middle-income early retirees will especially feel the pinch as the income threshold for premium assistance is set to fall back to 400 percentof the federal poverty level, reinstating the old “subsidy cliff” present in the original ACA program.
- Expensive Markets – For individuals living in the most expensive markets, the premium increase could be really significant. A 60-year-old individual living in southern Illinois, will see premiums increasing from $400 a month with subsidies, to $2,800 a month without. In addition, people living in rural areas pay higher premiums. Fewer than 10 percent of ACA customers make $65,000 or more according to KFF.
- Older With Higher Income – Insurers are allowed to charge higher prices for older people. The subsidies for those at higher incomes make the biggest difference for people close to retirement age. About 26 percent, on average for a typical plan, are piled on top of the lost subsidies. Some older people with high incomes can save money with the extra subsidies. But, without them, they will pay even more than they already do. See the “Monthly Premiums for Individuals Earning $65,000” chart below.
(Editor’s Note: Joanne Bump serves as feature columnist for “Retirement Matters.” Column content is time sensitive and is based on information as of 11/9/25. Sources are primarily from non-profit, and government policy research organizations. Joanne can be contacted by e-mail at joannebump@gmail.com.)