With professional backgrounds in economics and accounting, Barbara Brockway and Matt Padula might look like they could have retirement pegged to the dollar. But one line proved more difficult to foresee: health insurance.
After the Affordable Care Act’s enhanced subsidies expired in 2026, the retired Georgia couple saw their monthly Marketplace premium jump from $1,600 to $3,200, which is nearly $39,000 more for the year (1).
At age 62, they still have years of Medicare eligibility left. And because they “wouldn’t even dream” of going without coverage, they say higher premiums are forcing them to rethink retirement spending. Brockway told CBS Atlanta that they will have to cut back on day-to-day expenses, including discretionary costs like dinners and vacations.
Market subsidies are phased out again at higher income levels. Beginning in 2026, households generally must earn no more than 400% of the federal poverty level to qualify for financial assistance, meaning some middle-income enrollees may now receive little or no assistance.
Some households that previously benefited from enhanced subsidies now face higher premiums. And early enrollment data suggests some consumers may be reconsidering marketplace coverage.
CMS data show that Marketplace enrollment is already trending lower in early 2026. As of January 12, 2026, about 22.8 million people had enrolled in Marketplace coverage, down from 24.16 million at the same time in 2025, a decrease of about 1.4 million enrollees year over year (3, 4).
Across demographics, a KFF poll found that roughly 50 percent of Americans say it’s a struggle to keep up with health care costs. The researchers found that these rising costs were enough to cause one in three Americans to postpone coverage. But even among those with health insurance, 4 in 10 say they are nervous about paying their premiums (5).
It’s not just consumers feeling squeezed: Insurers may also be reevaluating the market in some states.
The Urban Institute found that 21 states reported fewer insurers in the Marketplace (6), and Aetna was one of the largest opting out (7). The researchers speculated that insurers are leaving because of the uncertainty created by the loss of the 2026 subsidies and fears that they may have to cover “sicker” customers (6).
Higher perceived risk in today’s Marketplace also increased premiums by 21.7% in 2026, compared to the most predictable annual growth of 2% (6).
And people in the Brockway and Padula age range are in the most expensive area. ValuePenguin found that average 2026 ACA premiums for people in this range rise from $1,598 to $1,766 between ages 60 and 64 (8).
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When you’re planning for retirement, you should expect health care costs to take a big chunk out of your cash flow. That’s especially true if you’re trying to retire before you qualify for Medicare, like Brockway and Padula.
Western & Southern Financial Group estimates that health care is one of the biggest expenses faced by retirees, second only to housing. The company projects that someone retiring at age 65 may need approximately $165,000 saved to cover health care costs during retirement.
Also, keep in mind that healthcare costs tend to rise faster than inflation
It cannot be avoided that planning for higher healthcare costs is essential. That’s why standard strategies like projecting your cash flow in a money management app and building three to six months of emergency savings are among the best ways to prepare for unexpected health emergencies.
But there are other ways to make costs more manageable while keeping some discretionary income.
For example, accounting professor Usha Rackliffe offered advice on Brockway and Padula’s situation, noting that only taxable income counts toward ACA grants. Rackliffe recommended trying to find ways to “maneuver for a year or two” to shift some of the income to non-taxable and qualify for the grant.
Also, ACA grants are based on projected annual income. So, if you think your income might drop, updating this information could make you eligible for more financial aid.
Even if you’re happy with your current plan, it might not be the best deal. Shop around for different deals, and don’t forget to consider other costs, such as deductibles, copayments and out-of-pocket limits, especially if you expect to use the care regularly.
Since healthcare costs can be confusing, it’s best to bring expert guidance to make the right decision, both for your physical and financial health. Remember, it’s free to consult a state marketplace navigator to help you explore marketplace options that fit your situation.
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We only rely on verified sources and credible third-party reports. For more information, see our ethics and editorial guidelines.
CBS News (1); HealthInsurance.org (2); CMS (3, 4); KFF (5); Urban Institute (6); NPR (7); value penguin (8)
This article provides information only and should not be construed as advice. It is provided without any warranty.
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