By Brianne Ledda

Updated December 15, 2025 3:46 pm

Read on Newsday

Virginia and Michael McGrath were surprised in late November when the retired West Islip couple got a letter notifying them that their health insurance bill would rise about 20% next year.

Their plan with EmblemHealth will cost $862 per month starting Jan. 1, $140 more than their current monthly premium.

“We really can’t afford it,” said Virginia McGrath, adding that the couple, who are both in their 70s, will have to figure out how to manage the extra cost. Virginia is scheduled for an important surgery in January — and the McGraths believe it would be a bad time to "shake up" their coverage. 

They are among millions of Americans, including Long Islanders, contending with higher health premiums taking effect in the new year as prices rise across coverage types.

The surge adds another pressure point to increasingly strained household budgets. Some policy holders might even drop coverage altogether, especially younger people with fewer pressing health needs, experts said.

Higher premiums "will result in cutbacks in overall spending,” especially among middle- and low-income families relying on tax credits to cover plans through the Affordable Care Act, said Martin Melkonian, an economist at Hofstra University in Hempstead.

“I think there are many folks living on the edge at this moment," Melkonian said.

Without action from the federal government, enhanced premium tax credits under the ACA are set to expire at the end of 2025, further increasing out-of-pocket costs for many consumers.

Most Long Islanders have some form of health insurance — 96.2% in Nassau County and 95.3% in Suffolk County, according to census data. The 28,000 Long Islanders who use federal tax credits to help cover costs for ACA plans stand to take the largest hit, with an average 32% price increase in 2026, in addition to the loss of income-based enhanced tax subsidies. 

Premiums are also rising for other plans, including Medicare and employer-sponsored insurance, fueled by hospital consolidation, an aging population and increased expenses for medical services, among other things, Newsday has reported. 

A September survey estimates employer insurance plans will go up 6.5% on average in the highest increase since 2010, Newsday has reported. The more than 1,700 employers who participated in the survey from Mercer, a Manhattan-based consulting firm, estimated that without cost-saving measures, average benefit costs would rise nearly 9%.

In New York, businesses with 100 or fewer employees on small-group plans will see an average 13% increase, while nongroup, individual-based plans will rise 7.1% on average, according to a Newsday analysis. The state Department of Financial Services approved some of the largest hikes in years for state-regulated plans, though the agency said the increases were still significantly lower than what insurers requested, Newsday has reported.

Meanwhile, Medicare premiums will rise around 10%, according to the Medicare Rights Center, a consumer advocacy nonprofit.

The cost increases “might mean that some people have to pick up an extra job to be able to meet their health insurance premium, dollars-wise,” said Matthew McGough, a policy analyst at KFF, a nonprofit health policy organization.

Some may choose lower-cost plans with higher out-of-pocket expenses while others, especially young and healthy individuals, might choose to forgo individual insurance plans entirely, a decision that could lead to higher overall health premiums down the line, he said.

People putting more money toward bills means less disposable income reentering the local economy, especially in places with high costs of living like Long Island, said Steven Kent, chief economist for the Long Island Association.

Chris Reilly, 80, of Manorville, is concerned that yearly increases to his Medicare premiums in recent years have outpaced yearly cost-of-living adjustments to Social Security checks, which, along with savings, he uses to pay his bills in retirement.

“Anybody who’s on Social Security, their Social Security increase gets practically totally consumed just by premium increases related to Medicare,” Reilly said.

The loss of enhanced tax subsidies at the end of the year will especially hurt small business owners, along with middle-class households more broadly, many of whom qualify for and rely on the federal tax credits, said Vanessa Baird-Streeter, CEO of the Health and Welfare Council of Long Island, a regional nonprofit that provides community services.

“People are going to be making these choices between, ‘What am I eating? Am I paying my insurance? Am I paying my mortgage?’” she said.

Households with income up to 400% the federal poverty line — $124,800 for a family of four — qualify for tax premiums, according to the Center on Budget and Policy Priorities. Even those making more than the cutoff may qualify for enhanced credits if their ACA premium exceeds 8.5% of their household income.

Nearly half of adults under 65 enrolled in individual market coverage through ACA are connected with small businesses — either as an employee at a business with fewer than 25 workers, as a self-employed entrepreneur or as a small business owner, according to a KFF analysis.

With ACA premiums rising as much as 50% for some on Long Island, according to Baird-Streeter, it’s an added expense for small businesses already struggling with higher costs from inflation and tariffs.

“Long Island is made up of Main Streets,” she said. “We’re talking about our local downtowns, and those are small business owners that are going to definitely be hit.”

Small businesses make up around 90% of businesses on Long Island, Newsday has reported, employing hundreds of thousands of workers.

Health insurance premiums already rival rent costs for some small business owners, said Joseph Garcia, vice president of the Nassau Council of Chambers of Commerce.

“It already was stifling small business creation and success," he said. "[The increases] aren’t going to help.”

There’s a concern that higher premiums could reduce entrepreneurship on Long Island by holding back people from striking out on their own to start businesses, Kent added.

Higher premiums could also drive existing small business owners to seek more stability through an employer sponsored health insurance plan at a different job, McGough said.

Part of the problem for small business owners, and Long Islanders in general, is the ongoing uncertainty about what’s going to happen with ACA subsidies, Kent said.

On Thursday, the Senate rejected legislation to extend ACA subsidies for another three years, along with a Republican alternative that would have created new health savings accounts instead.