Employer health insurance premiums expected to jump 11% in 2027, largest increase in two decades

Employer-sponsored health insurance premiums are projected to jump 11% in 2027, the largest single-year increase in two decades. This spike, alongside the expiration of pandemic-era Affordable Care Act subsidies, has forced millions of Americans—including healthcare workers—to drop coverage. Many are turning to risky, unregulated short-term plans and health-sharing ministries, while hospitals report a rise in costly uninsured patients. Experts warn these soaring costs are dampening wage growth and distorting the labor market.

Rising employer health insurance premiums

• ▪The portion of premiums that workers pay today for employer-sponsored health insurance would have covered the entire premium cost in the year 2000.
• ▪Employer-sponsored health insurance premiums are expected to increase by 11% in 2027, marking the largest single-year increase in two decades.
• ▪U.S. employers expect their health benefit costs to jump by an additional 8.2% for 2027.
• ▪If premium increases over the next 25 years mirror the past 25 years, employer health insurance premiums are projected to reach $120,000 by 2050.

Expiration of Affordable Care Act subsidies

• ▪The Republican-led Congress opted in 2025 not to renew the enhanced Affordable Care Act marketplace premium tax credits enacted during the COVID-19 pandemic.
• ▪The Congressional Budget Office estimates that the expiration of expanded Affordable Care Act subsidies and $1.1 trillion in cuts from the One Big Beautiful Bill Act will increase the number of uninsured people in the U.S. by roughly 15 million over 10 years.

Affordable Care Act marketplace premium increases

• ▪Approximately 3 million Americans dropped out of the Affordable Care Act marketplace due to sharp increases in premiums and deductibles at the beginning of 2026.
• ▪Insurers in the Affordable Care Act marketplace have proposed a median premium increase of about 15% for 2027, representing the second consecutive year of double-digit hikes.

Hospital reports on uninsured patients

• ▪In July 2026, the chief executive officer of Universal Health Services stated that most patients who dropped their Affordable Care Act coverage appeared to be uninsured.
• ▪Several hospital operators, including Pennsylvania-based Universal Health Services, have reported rising costs associated with treating an increasing number of uninsured patients.

Alternative health-sharing arrangements

• ▪Sabrina Corlette, a research professor at Georgetown University, warned that health-sharing arrangements and alternative insurance products lack standard consumer protections and are vulnerable to deceptive marketing.
• ▪Some Americans who dropped Affordable Care Act coverage have shifted to short-term health plans or joined health-sharing programs like Zion HealthShare.

Debatable claims

• ▪Congress was justified in letting the enhanced Affordable Care Act subsidies expire
• ▪The United States should replace employer-sponsored health insurance with a universal public system