Obamacare Premiums Surge: Insurers Propose 14% Hike for 2027
Middle-income Americans already straining under the weight of rising health insurance costs are unlikely to catch a break next year. A new analysis from the healthcare research nonprofit KFF reveals that insurers in the Affordable Care Act Marketplace are proposing a median premium increase of 14% for 2027 — the second consecutive year of double-digit hikes AP News.
If finalized, typical premiums will have jumped by more than one-third over a two-year period, following a steep 20% median increase in 2026 — the highest in nearly a decade KFF Analysis.
Who Bears the Brunt
While most ACA enrollees qualify for subsidies that shield them from the full cost, middle-class households earning at or above 400% of the federal poverty level — roughly $63,000 for an individual or $129,000 for a family of four — lost all subsidy eligibility when enhanced premium tax credits expired on January 1, 2026. These households now face the full weight of rising premiums.
“Those are the folks who kind of got a double whammy this year,” said Stacey Pogue, a senior research fellow at Georgetown University’s Center on Health Insurance Reforms, whose own analysis also projects double-digit increases Georgetown CHIR.
Why Premiums Are Rising
Insurers cite several interconnected drivers behind the proposed increases:
Rising healthcare costs remain the primary factor. The median change in underlying medical cost trend hit 10% for 2027, up from an average of 8% in recent years. Insurers point to higher hospital and physician reimbursement rates, rising prescription drug costs — particularly GLP-1 medications, whose costs have more than tripled for some insurers — and increasing claims severity as patients require more complex care.
The expiration of enhanced subsidies has triggered a vicious cycle. When the pandemic-era tax credits expired, healthier enrollees dropped coverage, leaving a sicker, more expensive risk pool. ACA Marketplace enrollment fell by roughly 2.6 to 3 million people in 2026 — a 13% decline. Insurers estimate this dynamic alone adds about 4 percentage points to premium increases for 2027 KFF Press Release.
“When the healthy people leave, the prices go up,” Pogue said. “The analysts all predicted that, and now that’s what we’re seeing.”
Federal regulatory changes have added further uncertainty. The Trump administration’s 2027 Notice of Benefit and Payment Parameters (NBPP), finalized later than usual in May 2026, includes new enrollment paperwork requirements and expanded catastrophic plan eligibility. A coalition of cities, physicians, and small businesses has filed a lawsuit challenging many of its provisions.
Insurer Exits and Market Instability
At least six insurers — including Cigna Health, Providence Health, and PacificSource — have announced they will exit ACA Marketplaces in 2027, affecting roughly 650,000 people who will need to select new plans. Providence CEO Erik Wexler cited an “untenable situation” for regional, not-for-profit plans as larger competitors consolidate.
A Glimmer of Hope
New Mexico stands alone as the only state that saw ACA enrollment increase this year, gaining 14% more enrollees. The state achieved this by using state funds to fully replace the expired federal subsidies. “In New Mexico, we believe health insurance should protect people against medical debt, not cause it,” said Tim Fowler of the New Mexico Health Care Authority AP News.
What’s Next
2027 rates will be finalized later this summer after state regulatory review. With the November midterm elections approaching, healthcare affordability is expected to be a central voter concern. Whether Congress will act to restore enhanced subsidies or address the underlying cost drivers remains an open question.
For the millions of Americans who rely on the ACA for coverage — particularly those who no longer qualify for financial help — the outlook for 2027 offers little relief.