For the second consecutive year, Obamacare premiums are set for a double-digit increase, with insurers proposing a median 14% hike for 2027. This follows a 20% jump in 2026. The increases are driven by the expiration of pandemic-era subsidies, rising healthcare costs, and a sicker enrollee pool after 2.5 million people left the marketplace. Middle-class families earning too much for subsidies face the largest affordability burden.
2027 Premium Increases
- ▪Based on proposed rates, ACA premiums are on track to increase by more than 33% between 2025 and 2027
- ▪The proposed 2027 rate hike marks the second consecutive year of double-digit premium increases for ACA plans
- ▪Insurers are proposing a median premium increase of 14% for Affordable Care Act plans in 2027
- ▪In 2026, the median premium increase for Affordable Care Act plans was 20%
- ▪The proposed 14% increase for 2027 is the second-highest since 2018
Insurer Cost Drivers
- ▪Insurers expect a sicker enrollee pool to increase premiums by 4% in 2027 as healthier members drop coverage
- ▪Federal regulatory changes from the Trump administration were also cited by insurers as a factor in raising premiums
- ▪Insurers attribute the proposed rate hikes to rising healthcare costs, including hospital visits and prescription drugs, and general economic inflation
Enhanced Subsidy Expiration Impact
- ▪The expiration of enhanced tax credits led healthier individuals to leave the ACA marketplace, resulting in a sicker, more costly patient population
- ▪The expiration of pandemic-era enhanced federal subsidies is a primary driver of the premium increases
- ▪After the extra subsidies expired, average premiums rose 58% in 2026, and deductibles increased by about $1,000 per person
Marketplace Enrollment Decline
- ▪ACA enrollment fell 13% in 2026, from 22.1 million people in 2025 to an estimated 19.2 million
- ▪In 2025, CVS Health's Aetna unit announced it would not offer Obamacare plans in 2026 due to anticipated cost increases
- ▪The Affordable Care Act marketplace lost more than 2.5 million enrollees over the past year
Middle-Class Affordability Burden
- ▪The issue of surging ACA premiums is expected to be a focus in the November midterm elections
- ▪Some unsubsidized enrollees saw their premiums double or triple in 2026
- ▪Middle-class enrollees earning more than 400% of the federal poverty level do not qualify for subsidies and will be most affected by the rate hikes
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