For millions of Americans, choosing health insurance already involves an uncomfortable calculation between what they can afford each month and what they’ll have to pay if they actually get sick. In 2027, that calculation could become even harder.
Health insurance costs are once again heading higher, and the increases aren’t limited to one corner of the system. People buying their own coverage through the Affordable Care Act Marketplace are facing another year of potentially steep premium increases, while employers, small businesses, and Medicare beneficiaries are confronting rising costs of their own.
For ACA Marketplace plans, insurers are proposing a median premium increase of 15% for 2027, following a finalized median increase of 20% in 2026. If approved, it would mark two consecutive years of unusually large increases.
But the headline percentages don’t tell the whole story. Some consumers are protected from much of the increase through subsidies or employer contributions. Others could feel nearly the full impact through higher premiums, deductibles, or copays.
Behind those increases is a combination of forces that has been building for years, from rising hospital and prescription drug costs to changes in federal subsidies and the rapidly growing expense of GLP-1 medications.
Here’s what’s changing for 2027, who’s likely to pay more, and what to watch for when open enrollment begins.
The Forces Pushing Health Insurance Costs Higher in 2027
The single biggest driver is the rising cost of health services, specifically hospitalizations, physician visits, and prescription drugs including GLP-1 weight-management medications. Labor shortages and general economic inflation have also pushed up provider wages, which in turn raises the cost of delivering care.
According to KFF, which analyzed filings from all 50 states and the District of Columbia, rising healthcare prices are the primary reason insurers are requesting larger premiums for 2027. Hospital price inflation has been especially steep. PwC’s Health Research Institute confirmed in its Behind the Numbers report that hospital and related services inflation reached a post-pandemic high of 7.59% year-over-year in February 2026.
Prescription drug spending is a growing share of the problem. GLP-1 medications – the class of drugs that includes popular weight-loss and diabetes treatments like Ozempic and Wegovy – have expanded rapidly across insurance plans. According to Blue Cross Blue Shield, GLP-1 drug claims rose from 6.9% of covered prescriptions in 2023 to 10.5% in 2025, and covering these medications could drive up premiums for employer-provided coverage by as much as 14%.
The consolidation of hospitals into fewer, larger health systems has also increased those systems’ bargaining power when negotiating prices with insurers, and ultimately with patients and employers.
What’s Happening With ACA Marketplace Plans
For the roughly 19 million Americans who buy their own coverage through the ACA Marketplace, 2027 arrives with a second consecutive year of double-digit proposed increases on top of an already bruising 2026. The median proposed premium increase across all 50 states and DC is 15% for 2027, following a finalized median increase of 20% in 2026.
The ACA’s enhanced premium tax credits, which had temporarily lowered monthly premiums for millions of middle-income Americans, expired at the end of 2025. As KFF noted, that expiration led younger, generally healthier enrollees to drop coverage disproportionately. When a pool of insured people skews older and sicker on average, claims go up, and premiums follow.
ACA Marketplace enrollment fell by approximately 3 million people in early 2026, according to KFF. That drop narrows the financial base over which insurers spread their risk. With fewer healthy people sharing the cost, the per-person price of coverage for those who remain rises.
The impact isn’t evenly distributed. People with incomes above 400% of the federal poverty level – roughly $62,600 for a single adult – receive no standard ACA subsidy and absorb the full increase directly.
These are proposed rates. State regulators review and sometimes modify insurer filings before they’re finalized each fall, and the actual increase any individual faces will depend on their insurer, state, plan tier, and income.
Employer Coverage: The Hidden Hit
For the roughly 165 million Americans with job-based insurance, costs are also climbing. Employer-sponsored healthcare costs grew 7.9% in 2026, the highest rate in more than a decade, according to Becker’s Payer Issues. Projections for 2027 point to continued elevated growth, driven by rising medical prices and expanding GLP-1 drug coverage.
Workers may not see their premium line on a pay stub jump by the full amount of their employer’s cost increase, because employers absorb a portion. Employers facing higher costs frequently respond by raising deductibles or shifting a larger share of the premium to employees. That can translate to a lower monthly premium but higher out-of-pocket costs when you actually need care.
According to Marsh’s 2027 cost projection, GLP-1 drug utilization is a meaningful contributor to projected 2027 employer cost growth.
Medicare Part D Changes Worth Watching
For Medicare beneficiaries, the Part D prescription drug benefit is undergoing changes that will affect some enrollees more than others. According to the Centers for Medicare and Medicaid Services, the base beneficiary premium for Part D will rise to $41.33 per month in 2027. [EDITOR: Replace “Centers for Medicare and Medicaid Services” with a working CMS link before publishing — the original URL returned 404.]
The more significant shift involves the expiration of a federal demonstration program that had been keeping Part D premiums artificially stable. CMS has confirmed it will discontinue the Part D Premium Stabilization Demonstration at the end of 2026. That program softened year-over-year premium swings for enrollees. Without it, individual plan premiums may vary more widely, making it more important than usual for Medicare beneficiaries to compare their specific plans during fall open enrollment rather than auto-renewing.
On Part B premiums, the most current projection comes from the 2026 Medicare Trustees Report, which estimates the standard monthly Part B premium at approximately $209.50 in 2027, up from the confirmed $202.90 in 2026. An earlier estimate from the 2025 Trustees Report had projected $218.60 for 2027; the downward revision reflects lower-than-expected program spending through the first half of 2026, though the final figure won’t be set by CMS until November.
The Small Business Picture
Employers with fewer than 50 workers, typically classified as small-group coverage, are facing their own version of the same pressures. According to KFF’s analysis of small-group rate filings, nearly 300 insurers offering small-group coverage reported a median proposed premium increase of 14% for 2027. Small-group insurers point to rising medical prices, including hospitalizations and physician care, increased drug spending, and higher utilization as the main drivers.
As more small businesses find the cost of offering traditional group coverage unsustainable, some are shifting to alternative arrangements like self-insurance or dropping coverage entirely. That shrinks the small-group enrollment pool over time, concentrating risk among those who remain and pushing costs higher for the businesses that stay.
Read More: 5 Medicare Changes for 2027 That Will Directly Affect Your Coverage and Costs
What to Do Before Open Enrollment
Larry Levitt, executive vice president for health policy at KFF, put it plainly: “Healthcare costs are going up faster than they have in years, and open enrollment is when the healthcare affordability crisis is really going to hit home for people. That’s true for whatever kind of insurance you have.”
Open enrollment for ACA Marketplace plans typically begins November 1. Employer plan enrollment windows vary but generally fall in the same timeframe. Medicare’s annual open enrollment runs from October 15 through December 7.
Comparing plans actively, rather than auto-renewing, is especially consequential this year. In a year when proposed premium increases range widely by insurer and location, the plan that was right for you in 2026 may no longer be the most affordable option in 2027. Switching plans, even within the same metal tier, can produce meaningful savings. For ACA buyers, using the healthcare.gov subsidy calculator with your actual expected 2027 income is essential, since subsidy eligibility is income-based and even a modest income change can affect what you qualify for.
For workers with job-based coverage, ask your HR department for a full summary of plan changes before you re-enroll. If your employer is raising deductibles or reducing benefits, a plan that looks the same on the premium line may cost you significantly more the first time you use it. Check the out-of-pocket maximum for your plan, not just the monthly premium – that number is the ceiling on what you can be required to pay in a bad year. For Medicare enrollees, comparing Part D plans directly through Medicare’s Plan Finder tool at medicare.gov is the fastest way to identify whether your current plan is still competitive on cost.
The Bottom Line
The final numbers for 2027 aren’t set yet. Many ACA rates are still proposals, Medicare premiums won’t all be finalized until later in the year, and what any one person pays will depend heavily on their plan, income, employer contributions, subsidies, and location.
What is already clear is that the pressure is moving in one direction. Medical care is becoming more expensive for insurers and employers, prescription drug spending continues to rise, and changes to federal subsidies have altered the ACA Marketplace. Those costs are increasingly being passed along to the people paying for coverage.
That doesn’t mean everyone’s insurance bill will suddenly jump 15% or 20%. Subsidies and employer contributions can absorb a significant portion of the increase, while some consumers may find cheaper alternatives by switching plans. But it does make automatically renewing the same coverage potentially more costly than usual.
As 2027 open enrollment approaches, the number worth watching isn’t simply the national percentage increase. It’s what your own plan will cost next year, what it will cover, and how much you’ll be expected to pay when you actually use it.
Disclaimer: This information is not intended to be a substitute for professional financial advice, investment advice, tax advice, or legal advice, and is provided for informational purposes only. Always seek the guidance of a qualified financial advisor, accountant, or other licensed professional regarding your personal financial situation or investment decisions. Do not make financial, investment, or tax decisions based solely on information presented here. Past performance is not indicative of future results, and all investments carry risk, including the potential loss of principal.
AI Disclaimer: This article was created with the assistance of AI tools and reviewed by a human editor.
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