ACA Insurers Propose 14% Median Premium Increase for 2027, Filings Show

Health insurers participating in the Affordable Care Act (ACA) marketplaces have proposed a median premium increase of 14% for 2027, according to a new analysis of preliminary rate filings released Wednesday. The report, published July 8 by the healthcare research nonprofit KFF, signals that millions of Americans and small businesses could face a second consecutive year of double-digit rate hikes for their health coverage.

For small and mid-sized businesses, this trend of relentlessly rising health insurance premiums represents a significant operational and financial challenge, complicating everything from annual budgeting to employee compensation and retention strategies.

The proposed increases follow a steep 20% median rate jump in 2026. If the 2027 proposals are finalized, typical premiums for plans sold on the ACA exchanges will have climbed by more than one-third between 2025 and 2027. The KFF analysis examined filings from 77 insurers across 16 states and the District of Columbia, finding that most requests fell between 10% and 20%, while 20 insurers are seeking increases of more than 20%.

Insurers cited a confluence of factors driving the proposed hikes, with the rising cost of medical services and prescription drugs chief among them. According to the KFF analysis, insurers project the underlying cost of medical care will grow by 10% in 2027, an acceleration from the 8% average growth seen in recent years. Specific drivers mentioned include the high cost of GLP-1 weight-loss medications and increasing prices for hospital services.

Another significant factor is a shift in the composition of the ACA insurance pool. The expiration of pandemic-era enhanced premium tax credits has increased out-of-pocket costs for many enrollees. This has led some healthier, more price-sensitive individuals to drop their coverage, according to an Axios report. This exodus leaves a pool of enrollees that is, on average, sicker and more expensive to insure.

Insurers estimate that this sicker risk pool was responsible for approximately four percentage points of the premium increase in 2026 and expect a similar impact in 2027. The market is also shrinking, with federal data released last month showing that ACA enrollment has declined by about 3 million people year-over-year, down to 19.2 million.

In our experience, unpredictable double-digit increases in healthcare costs are one of the biggest sources of financial stress for growing companies. It forces difficult trade-offs between offering competitive benefits and investing in growth. This is precisely the kind of complex variable that our outsourced CFO services help clients model and manage. By building dynamic financial forecasts, businesses can better anticipate these shocks and develop strategies to mitigate their impact on profitability and cash flow.

Federal regulatory changes have also been cited by some insurers as a contributor to rising premiums. The filings mention new enrollment and eligibility requirements instituted by the Trump administration. The administration, through a Health and Human Services report last month, stated these efforts are part of a crackdown on improper and fraudulent enrollments to ensure that federal subsidies are directed only to those for whom they are intended.

The findings from KFF align with other early analyses. A report published last month by Georgetown University’s Center on Health Insurance Reforms, which also examined preliminary rate filings, similarly projected double-digit premium increases for the coming year.

While the ACA marketplace serves less than 10% of the U.S. population, KFF notes that the underlying cost pressures are not unique to these plans. The same drivers—higher prices for drugs, hospital care, and labor—are likely to push up costs for other private health plans, including the employer-sponsored coverage that is the primary source of insurance for most working Americans.

The key takeaway for business leaders is that employee healthcare can no longer be treated as a static line item. Proactive financial modeling and strategic benefits planning are essential for stability in this volatile environment. This is a core focus of the advisory work we provide at C&S Finance Group LLC, and business owners looking to gain control over these costs can find guidance at csfinancegroup.com.

The proposed rates are not yet final. Health insurance companies have until July 15 to submit their proposed premiums for 2027 ACA plans. State regulators will review the requests over the coming months, and final rates for the next open enrollment period will be approved later in the summer.