Obamacare Premiums Set for 14% Median Increase in 2027, Second Consecutive Year of Double-Digit Hikes

Dec 3, 2025

Affordable Care Act marketplace insurers are proposing a median premium increase of 14% for 2027, marking the second consecutive year of double-digit hikes. The increases are driven by rising medical costs, including GLP-1 drugs, and the expiration of enhanced federal subsidies. This expiration has led healthier enrollees to drop coverage, leaving a sicker, more expensive risk pool. Consequently, enrollment has fallen to 19.2 million, leaving middle-income families earning over 400% of the poverty level to bear the full cost of rising premiums.

ACA marketplace premium increases

▪KFF analyzed preliminary rate filings from 77 insurance plans across 16 states and Washington, D.C., finding that nearly half seek 2027 increases of 10% to 15%.
▪Between 2025 and 2027, Affordable Care Act marketplace premiums will have increased by one-third if the preliminary filings hold.
▪The proposed 14% median rate hike for 2027 marks the second consecutive year of double-digit premium increases in the Affordable Care Act individual market.
▪Health insurance companies are seeking a median rate hike of 14% for 2027 Affordable Care Act plans, according to a preliminary analysis by KFF.

Healthcare sector cost pressures

▪The underlying cost of medical care and prescription drugs for marketplace insurers rose by 10% for 2027, compared to an 8% average growth in recent years.
▪Insurers cited rising healthcare costs, including hospital bills and prescription drug spending driven by GLP-1 anti-obesity drugs and specialty drugs, as key factors for 2027 rate hikes.

Enhanced subsidy expiration effects

▪The expiration of enhanced Affordable Care Act premium tax credits at the end of 2025 left more enrollees responsible for a larger share of their health insurance bills.
▪The expiration of enhanced subsidies has increased the federal government's cost of subsidizing coverage for remaining eligible lower-income individuals in the marketplace.

Middle-income enrollee burden

▪Middle-income enrollees who do not qualify for federal subsidies face the full impact of the proposed premium increases, with some experiencing doubled or tripled premiums.
▪Affordable Care Act enrollees with incomes at or above 400% of the federal poverty level, approximately $63,000 to $64,000 for an individual, do not qualify for premium subsidies.

Marketplace enrollment population decline

▪Affordable Care Act marketplace enrollment fell to 19.2 million people as of February 2026, down from 23.1 million in January 2026.
▪The Trump administration attributed the decline in Affordable Care Act enrollment to a crackdown on improper and fraudulent enrollments.

Sicker risk pool composition

▪Insurers estimate that a sicker risk pool drove premiums up by approximately four percentage points in 2026 and expect a similar impact in 2027.
▪The departure of healthier, price-sensitive enrollees from the Affordable Care Act marketplace has left behind a sicker and more expensive pool of patients to insure.