ACA premiums set to spike again in 2027

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Dive Brief:

• Premiums for health plans on the Affordable Care Act exchanges are poised to spike again next year as policy upheaval and rising healthcare costs continue to roil the insurance marketplaces, according to a report released Wednesday by KFF and the Peterson Center on Healthcare.
• ACA insurers are proposing a median premium increase of 14% for 2027, suggesting another year of double-digit hikes, according to the analysis, which reviewed preliminary rate filings in 16 states and Washington, D.C.
• If the projected increase plays out, typical premiums for ACA marketplace insurers would rise by more than one-third between 2025 and 2027. 

Dive Insight: 

Insurers have until July 15 to submit proposed premiums for 2027 ACA plans. So far, most payers are seeking increases between 10% and 20%, according to the latest analysis of proposed rates from 77 marketplace insurers.

Twenty insurers requested hikes of more than 20%. None suggested decreasing premiums.

If premiums increase in line with insurers’ proposals, 2027 would serve as another year of significant cost increases for ACA enrollees. More generous financial assistance for people who buy coverage on the ACA exchanges lapsed at the end of 2025 after Congress declined to extend the subsidies, pushing many enrollees to drop their coverage or shift to cheaper plans. 

Last year’s median nationwide proposed rate increase was 18%, and the finalized rate change was 20%. The proposed rate hike for 2027 represents the second-highest request since 2018, according to KFF and Peterson. 

Insurers cited several reasons for the hike. One factor is the expiration of the enhanced premium tax credits, which pushed healthier enrollees to leave the marketplaces, leaving behind sicker beneficiaries who are more expensive to cover.

Rising healthcare costs are driving premiums higher too, as hospitalizations, physician visits and prescription drugs — including expensive GLP-1 medications for weight loss — continue to increase spending. General inflation, high costs for healthcare labor and increasing claims severity are also contributing to heightened healthcare expenses. 

Other federal policy changes are impacting the marketplaces too, according to the report. In May, the CMS finalized a regulation that increases access to cheaper plans and requires exchanges to do more to ensure enrollees are eligible for plans and subsidies. 

The rule, which is published annually and sets guidance for how the marketplaces operate, also wasn’t finalized until after some payers had already put together their proposed rates, creating additional uncertainty for insurers, according to the analysis.