Middle-income Americans who buy their own health insurance are unlikely to catch a break next year, according to a new analysis released Wednesday by health policy nonprofit KFF, which found that insurers are proposing a second consecutive year of double-digit premium increases. Across the 77 Affordable Care Act insurers that have filed public rate requests in 16 states and Washington, D.C., the median proposed premium increase for 2027 is 14%, according to the Peterson-KFF Health System Tracker.

The proposed increase comes on top of already steep increases this year. Median premium requests for 2026 reached 20%, meaning marketplace premiums could rise by more than one-third between 2025 and 2027 if regulators approve the latest filings. Cynthia Cox, Director of KFF’s Affordable Care Act Program, described the situation as a triple hit for consumers who have already faced higher premiums and reduced federal tax credits.

Insurers cited several factors driving the proposed increases. The largest remains the rising cost and use of healthcare services, including hospital care, physician visits and prescription drugs. Growing demand for GLP-1 weight-loss medications has also added significant pressure to insurers’ medical costs. More broadly, inflation continues pushing higher labor costs and provider expenses throughout the healthcare system.

Another important factor stems from changes to federal subsidies. According to KFF, roughly four percentage points of the proposed increases are tied to the expiration of enhanced Affordable Care Act premium subsidies that lapsed at the end of 2025. The organization estimates that change alone contributed to a 58% average increase in out-of-pocket premiums during 2026, while increasing deductibles by roughly $1,000 per person.

Some insurers also pointed to regulatory changes affecting enrollment and eligibility, along with higher medical claims resulting from patients requiring more intensive care. Several companies noted that healthcare providers are increasingly using artificial intelligence tools to identify billing codes that maximize reimbursements, contributing to higher claims costs.

Most marketplace enrollees will continue receiving some level of financial assistance that shields them from the full premium increases. However, households earning more than 400% of the federal poverty level—approximately $62,600 annually for an individual—generally no longer qualify for premium assistance and therefore face the full cost of rising insurance prices. Stacey Pogue of Georgetown University’s Center on Health Insurance Reforms, whose independent research reached similar conclusions, said those consumers will experience the greatest financial impact.

The effects extend well beyond individuals purchasing coverage through Affordable Care Act exchanges. The same medical inflation affecting marketplace plans is also increasing the cost of employer-sponsored health insurance. PwC projects that healthcare costs for employer-sponsored plans will rise another 9% during 2027, placing additional pressure on businesses already coping with higher labor and operating expenses. Small employers, in particular, may face difficult decisions involving employee benefits, hiring and compensation.

Affordable Care Act enrollment has already declined by approximately 3 million people compared with a year earlier as higher costs have caused some consumers to leave the marketplace. While insurers still have until July 15 to submit final filings and regulators may reduce some requested increases before approval, the early data point toward another challenging enrollment season when consumers begin shopping for 2027 coverage later this year.

For households, employers and insurers alike, the underlying trend remains the same: healthcare costs continue climbing faster than overall inflation. Unless medical spending moderates or new policy changes provide relief, Americans shopping for individual health coverage should prepare for another year of higher premiums and rising out-of-pocket costs.

JBizNews Desk | Washington

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