2027 Insurance Costs Expected to Jump

The open enrollment period for the Affordable Care Act marketplace opens on Sunday in most states, with the window running through January 15. Enrollees are entering this cycle facing a set of structural changes that are expected to raise the average cost of health insurance by 13 percent in 2027. This projection comes from an analysis of new data from the Centers for Medicare & Medicaid Services conducted by the healthcare research nonprofit KFF.

The primary driver of these cost increases is the expiration of financial assistance that was previously available to many groups. Premium tax credits and cost-sharing reductions, which were extended during the Biden administration, are now restricted. Healthcare experts predict that these changes will result in less coverage and higher prices for consumers. Cynthia Cox, a vice president and director of the ACA program at KFF, noted that the rise is also fueled by increasing healthcare costs, hospital market concentration, and the impact of the No Surprises Act and the availability of GLP-1 drugs.

The financial burden falls heaviest on those who do not qualify for subsidies. Cox stated that many of these individuals have already moved into bronze plans, which are the cheapest options available. She observed that some may struggle to afford coverage into next year, noting that a lot of them are already in the lowest tier of plans. A fact sheet distributed by CMS on Friday claims that Americans using HealthCare.gov will have access to low-cost plans, but the data suggests a different trajectory for many buyers.

New regulations starting in 2027 will also limit tax credits for certain lawfully present immigrants. This change could result in an additional one million uninsured individuals over time. The Trump administration has also been removing enrollees from the program as part of a campaign against what it characterizes as waste, fraud, and abuse. In September, Vice President JD Vance and other officials announced plans to remove 760,000 ACA enrollees, alleging fraudulent enrollment or non-existent individuals. Vance said the canceled subsidy payments would result in $2.2 billion in cost savings.

The number of active enrollees has shifted in recent years. As of February, roughly 19.2 million people in the United States were actively enrolled in ACA marketplace health plans, according to the Department of Health and Human Services. This figure grew during the pandemic when enhanced subsidies became available through the American Rescue Plan Act and Inflation Reduction Act. However, the price of insurance has risen for many during the second term of President Trump after Republicans opposed extending those COVID-era subsidies. That opposition resulted in 1.2 million fewer people signing up for coverage in the exchanges compared to previous periods.

It remains unclear how many more people will drop off of ACA coverage in 2027. Cox said that with higher premiums, immigration eligibility changes, and anti-fraud efforts, there will likely be fewer people enrolled in this market. She added that it will be harder to understand the specific reasons for the decline as these different factors interact. The market is entering the 2027 cycle with these constraints already in place, setting the stage for a different enrollment environment than seen in recent years.