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Why It Matters
Health insurance premiums on federal Affordable Care Act Marketplace plans are heading sharply higher in 2027, marking the second consecutive year of double-digit increases. The surge threatens affordability for millions of Americans relying on ACA coverage, particularly those who lost federal subsidies last year and now face the full cost of rising premiums.
What Happened
Insurers across the nation have proposed a median premium increase of 14% for 2027 Marketplace plans, according to preliminary rate filings examined in an analysis of 77 insurers across 16 states and Washington, D.C. The majority of insurers are seeking increases between 10% and 20%, while 20 insurers alone are requesting hikes exceeding 20%. Not a single insurer in the analysis proposed lowering premiums.
Insurers must submit their final rate requests to state regulators by July 15, with finalized rates expected later in the summer. The 14% median proposed increase follows an 18% median proposed increase last year that ultimately settled at a 20% finalized increase—the highest rate change since 2018.
By the Numbers
- 14%: Median premium increase proposed for 2027
- 20%: Finalized rate increase for 2026
- 2.6 million: Fewer Americans enrolled in ACA Marketplace plans in February 2026 compared to the same month the previous year
- $63,000: Approximate annual income threshold for a single person to lose all federal subsidies
- 77: Insurers analyzed in the preliminary rate filing review
Root Causes Behind Rate Hikes
Insurers cite three primary drivers for the steep increases: the expiration of enhanced federal premium tax credits, rising healthcare costs, and recent federal regulatory changes. Enhanced subsidies, which had temporarily lowered out-of-pocket costs for millions, expired at the end of the previous year. Enrollees earning at or above 400% of the federal poverty level—roughly $63,000 annually for a single person—lost eligibility for subsidies entirely.
The subsidy expiration has altered the composition of the Marketplace pool. Healthier, younger enrollees who could afford higher premiums without assistance have left the system, leaving behind a costlier, older, and sicker population. This shift in enrollment demographics drives insurers to raise rates to cover the increased medical needs of those who remain.
Growing Coverage Gap
The combination of higher premiums and reduced subsidies is already taking a toll on enrollment. The Marketplace lost 2.6 million enrollees in February 2026 compared to the same month the previous year, indicating that consumers are voting with their feet as affordability deteriorates. Many who can no longer access subsidies face a choice between purchasing unaffordable coverage or going uninsured.
The projected 14% increase for 2027 represents the second-highest requested rate change since 2018, signaling that Marketplace stability remains under pressure as the temporary subsidy boost that propped up enrollment has fully expired. Without legislative action to restore or extend premium assistance, the affordability crisis is likely to deepen.
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