Airport TSA Lines and Your Health Insurance Premiums
Rising Costs, Legislative Uncertainty, and Tough Decisions
As we approach the 2026 health insurance renewal season, there’s no sugarcoating it: premiums are going up, insurance options are narrowing, and this year’s open enrollment process will test everyone’s patience.
Let’s take a moment to properly set expectations: Health insurance renewal season is going to feel like being in a long TSA line at the Philly International Airport when there aren’t enough TSA lanes open, everyone is really mad at each other, and your departure time keeps changing. Then, while you are waiting in line… the price of your flight goes up!
Inflation, post-COVID claim patterns, the government shutdown, and still-unfolding legislation are shaping the market into what may be the most significant reset to the health-insurance landscape since the Affordable Care Act’s debut in 2014. As a result, plan reviews and enrollments with your agent and carrier will likely be busier and slower than usual.
Medicare: Change Is Coming for Just About Everyone
Prescription drug reforms will cap annual out-of-pocket costs at $2,000 in 2025 and $2,100 in 2026—great news if you’re someone who spends a fortune at the pharmacy.
But for most, the financial benefit will be modest, while premiums and co-pays rise across the board to cover the shift in cost burden from Medicare to private plans and pharmaceutical manufacturers.
At the same time, stand-alone drug plans are disappearing, down from 21 in 2024 to just 12 in 2026, leaving fewer choices and higher costs—think trying to buy a plane ticket during a snowstorm (okay, we are stretching our metaphor here a bit).
The “Three-year reset” in Medicare Advantage
A second wave of disruption is now unfolding in the Medicare Advantage market. Carriers across the country are terminating or consolidating plans in what the industry calls a “three-year reset”—an effort to correct the imbalance between claims and reimbursements that emerged after COVID. Essentially, millions of Medicare Advantage plans are being cut, trimmed, or consolidated.
For example, Independence Blue Cross (IBX) eliminated three of its four PPOs, keeping just one $0 premium plan. It’s the largest plan cutback in the company’s 85-year history… and not an isolated case.
For those affected, there are practical paths forward:
- If you’re healthy, this might be the right time to consider a Medicare Supplement plan for long-term stability.
- If you’re staying with Medicare Advantage, a thorough plan review is essential to confirm that your 2026 coverage still aligns with your medical and financial needs.
- If your plan is discontinued, you may qualify for a Special Enrollment Period—a short window to move into a Medicare Supplement plan without underwriting. That’s a rare opportunity and may be worth acting on.
Supplement Plans Under Pressure
Even traditionally stable supplemental plan carriers are seeing 15–20% premium increases to keep pace with rising claims. A timely review may help you lock in a lower premium or secure better coverage before additional increases take effect.
Individual Market Plans: More Expensive, Less Generous
If you’re under age 65 and not yet Medicare-eligible, the individual and ACA markets are experiencing the same pressures:
- Carriers have proposed 25–33% premium increases.
- The maximum out-of-pocket limit is jumping from $9,200 to $10,600.
- Pandemic-era tax credits are expiring, which will hit households unevenly. Those who benefited most during COVID may see their out-of-pocket premiums rise sharply as the system reverts to pre-pandemic formulas.
Federal limits on short-term medical plans have removed many lower-cost alternatives, and as healthier members exit the market, premiums rise further for everyone who remains. It’s not a new pattern, but it’s accelerating.
What You Can Do Now (and Why It Matters)
- Review your income and plan design. Even small adjustments to your AGI or the timing of certain distributions can sometimes preserve or restore tax-credit eligibility.
- Evaluate HSA-eligible plans. These high-deductible options paired with health-savings accounts may offer tax efficiency and flexibility.
- Consider supplemental coverage. Pairing an accident or hospital-indemnity plan with a higher-deductible health plan can meaningfully reduce total monthly costs while managing exposure to large claims.
Final Thoughts
This year’s open enrollment will bring higher costs, administrative congestion, and fewer obvious choices. It won’t be fun—but it is navigable. The most important step you can take is to tackle your renewals early in the enrollment season. Information will keep changing, which means insurance agents and carriers will be overwhelmed and response times will be slow.
We’ll be here monitoring developments and ready to help you make informed, cost-effective decisions that fit your broader financial plan. While we can’t make the process painless, we can make sure you don’t go through it alone.
Rethinking Conventional Index Investing
For decades, index investing has been praised as the efficient solution to high-cost and underperforming market timing and stock selection strategies. And for a long time, it delivered: broad diversification at a low cost, closely tracking the average returns of the market, which quite obviously is a superior strategy to picking stocks.
But markets evolve and so must our understanding of how best to invest in them. What started as a simple yardstick for measuring market performance has now become the default vehicle for trillions of dollars globally. Along the way, significant flaws have emerged in conventional indexes, requiring Rockwood to pursue strategies that glean the benefits of index funds, but with a more thoughtful structure to avoid their shortcomings.
Indexes Are Not “The Market”
A common misconception is that an index is the market. But it’s really more like “The Market According to Bob, Susan, and Three Other People in a Conference Room.” Indexes are built by committees who decide what companies are included, how they’re weighted, and how often rebalancing occurs. These are all active choices that shape index performance.
Take the “broad market” indexes from three major index providers: S&P, MSCI, and FTSE. Over the past two decades, the average difference in returns among just these providers has been close to 1% per year in developed markets and 2.7% per year in emerging markets. This is because Bob and Susan will define the “broad market” a bit differently than the committee down the street. These small differences, when compounded over time, create meaningful gaps in investor outcomes.
The Hidden Cost of Following the Crowd
Though “transparency” is often seen as a virtue, it’s precisely what makes index investing vulnerable. Every major index fund publishes ahead of time what will be bought and sold, and when, following what’s known as the publisher-tracker model.
Once index changes are announced, it’s like Black Friday but with all the frenzy and no discounts. Trading volume on those stocks surges—often 20 to 50 times their average daily volume—as market participants (usually hedge funds) scramble to get ahead of the forced buys and sells. By the time the index fund executes, prices have typically moved… and not in the investor’s favor.
Over the decade ending in 2023, stocks added or dropped from indexes moved 3–4% in price relative to their peers. These are real costs that do not show up in your fund’s expense ratio or “tracking error.”
Since every investor is benchmarking to the same index, you’d never notice these costs, but your returns are eroded just the same.
When “Passive” Turns Stale
Another often-overlooked flaw is the rigidity of index rebalancing. Many indexes reconstitute only quarterly, semi-annually, or annually—far too infrequently to keep pace with fast-moving markets. A small-cap index, for instance, may still hold companies that are clearly no longer small-cap. And because new dollars continue to flow into these stale portfolios, the problem compounds over time.
Eventually, the index stops reflecting the asset class it’s meant to capture. And even the next rebalance might not resolve it because, to limit turnover, many index providers now apply gradual migrations and overlapping rules. While these measures help reduce trading costs, they also extend the lag between market reality and portfolio exposure, further delaying alignment with the exposure that investors intend to hold.
A Smarter Way Forward
Indexing was an important innovation in investing. It lowered costs, expanded access, and removed many of the behavioral traps that plagued investors. But indexing was never intended to be the investment implementation vehicle itself, and we need to look past what is simply market-tracking toward something more deliberate.
Discerning investors are realizing that index investment does not always mean low costs, and that progress lies not in replicating a benchmark, but in striving to create higher expected returns per unit of volatility.
Rather than fearing tracking error, we can view it as a flexible boundary. Allowing for a small and measured deviation creates space to harvest premiums that traditional indexes miss. It opens the door to incorporate real-time information, manage trading costs more effectively, and avoid portfolio distortion. This way Rockwood’s clients derive the primary benefits of index funds—low costs and broad diversification, without suffering the effects of their inefficiencies as implementation vehicles. Let’s have our cake and eat it too…
John, a New Hope, Pennsylvania native, is the Founder and CEO of Rockwood Wealth Management. A former nuclear engineer, he is committed to the development and growth of conflict-free comprehensive financial planning and investment management. John values a client-centric practice and unwavering integrity in all of our endeavors as stewards of our clients' best interests.