Affordable Care Act (ACA) insurers are requesting substantial premium increases for 2027, with a median proposed hike of 14%, according to an analysis by the Peterson-KFF Health System Tracker. This comes even as enrollment in ACA plans has declined by about 3 million compared to the previous year, reflecting broader challenges in maintaining affordable coverage under shifting policy conditions.
What Happened
For the second consecutive year, many ACA insurers have filed proposals with state regulators seeking double-digit premium increases for plans offered in 2027. These filings cover 16 states plus the District of Columbia. If approved, the median 14% premium increase would be the second-largest since 2018. The rising premiums occur against a backdrop of declining enrollment, which stands approximately 3 million fewer enrollees than last year as of February.
The increase is driven primarily by escalating medical costs, including heightened demand for costly specialty drugs such as GLP-1 weight loss medications. Insurers also attribute part of the premium growth—about 4 percentage points—to residual effects from the expiration of the more generous subsidies introduced during the Biden administration. Policy changes implemented during the Trump administration are cited by some insurers as further contributing to higher premiums and enrollment challenges.
Key Facts
The Peterson-KFF Health System Tracker summarised these trends after reviewing insurer rate filings in multiple states. Key figures include a proposed median premium increase of 14% for 2027 plans, following significant hikes already seen in 2026. Enrollment has dropped by roughly 3 million compared to the same time last year.
While ACA subsidies now exclude individuals with incomes above 400% of the federal poverty level, people under this threshold still receive tax credits to offset premium costs. Declining enrollment is believed to disproportionately affect younger, healthier individuals who may opt out or choose other options, leaving an older, sicker risk pool for insurers. UnitedHealthcare noted that about 12.7% of its requested rate increase was attributable to policy changes and subsidy expirations. Meanwhile, health care claim intensity has increased, potentially due to greater illness severity or billing practices influenced by artificial intelligence.
What This Means
These premium increases accentuate the financial strain on ACA enrollees, particularly those whose incomes exceed subsidy eligibility thresholds. As coverage costs rise, healthier individuals may choose to forgo insurance, further elevating costs for remaining enrollees. This dynamic risks creating a cycle where rising premiums drive out healthier customers, pushing up costs and premiums further—an outcome that could undermine the sustainability of ACA marketplaces.
The rollback of enhanced subsidies following the Biden administration’s initial expansion means many consumers no longer benefit from substantial financial assistance, worsening affordability. The policy shifts contributing to premium growth also reflect ongoing tension between administrations about the scope of government support for ACA coverage.
For consumers, these developments may necessitate careful examination of coverage options during open enrollment periods. Switching to plans with lower premiums could become more essential to manage costs. Meanwhile, the rising cost of specialty medications and intensified care claims remains a systemic issue that challenges insurers’ pricing models and public health policy goals to provide affordable care.
Background
During President Joe Biden’s tenure, the ACA saw expanded subsidy programs designed to reduce out-of-pocket costs and increase enrollment, growing to more than 20 million Americans covered. The subsequent expiration of these subsidies, along with policy reversals under President Donald Trump’s administration, has influenced this year’s insurer filings and enrollment figures. The Trump administration has contested the legitimacy of much of the enrollment increase seen during the Biden era, describing portions as fraudulent—a claim rejected by some policy experts.
Analysis
Cynthia Cox, director of the Program on the ACA at KFF, described the current situation as a “triple whammy” for consumers: rising premiums for 2026, expiration of enhanced subsidies, and increased premiums requested for 2027. Cox further explained that healthier individuals are more likely to drop coverage amid higher costs, leaving a risk pool that is older and more costly on average.
UnitedHealthcare’s rate filings explicitly attribute a significant portion of premium increases to policy shifts and subsidy expirations. White House spokesperson Kush Desai defended the Biden administration’s stance stating they will not enable “taxpayer funded subsidies to big insurance companies” tied to fraudulent policies and aim to hold insurers accountable.
What Comes Next
If state regulators approve the proposed premium increases, 2027 ACA plans will reflect these higher costs. Enrollment for the 2027 coverage year opens in October, presenting a critical period for consumers to evaluate their options. Policy discussions and regulatory reviews concerning subsidy levels and ACA marketplace rules are likely to continue shaping insurer pricing and consumer access.
Sources
This article is based on reporting and publicly available information from the following sources:
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