Expect Rise in ACA, Medicare, Work Health Insurance Costs
TL/DR –
Health insurance costs for Americans are set to significantly increase in 2027, with some experiencing the largest premium rises in decades. The increases are driven by escalating health care costs, including higher prices for hospital and medical care, as well as an increased use of costly prescription drugs. ACA enrollees face steep premium increases after the expiration of enhanced federal subsidies, workers with job-based insurance may cover more of their employers’ rising health costs, and some Medicare beneficiaries could see changes to their prescription drug premiums after the termination of a program that helped control those premiums.
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The Rising Tide of Health Insurance Costs: What to Expect
A noticeable surge in the monthly costs for health insurance is on the horizon for Americans regardless of the source – be it work, the Affordable Care Act or Medicare. Some will see the largest premium increases in years, largely attributed to several economic factors. Additionally, others may face increased copays or deductibles.
Larry Levitt, executive vice president for health policy at KFF, a nonpartisan research group, commented, “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.” He noted this is true irrespective of the type of insurance one possesses.
Indeed, the upward cost spiral is evident in all aspects of daily life.
A significant portion of these escalating healthcare costs are attributed to rising charges for hospital and other medical care and the increased usage of costly prescription drugs, including GLP-1 weight loss medications, which are inflating expenses for insurers and employers.
Diverse Pressures Across Different Coverage Types
Each type of coverage faces its unique set of pressures.
For the approximately 19 million adults who procure insurance via the Affordable Care Act marketplace, the withdrawal of enhanced federal subsidies last year means they can anticipate another round of sharp premium increases.
Recently, the White House announced $500 rebate checks for an estimated 1 million ACA enrollees claiming wrongful overcharging. Despite this promise, there’s ambiguity surrounding the source of these rebate funds and whether Congressional approval is necessary for their distribution. In any case, experts agree that these checks are unlikely to offer significant financial relief.
Miranda Yaver, an assistant professor of health policy and management at the University of Pittsburgh, expressed that the proposed $500 check “pales in comparison to the increased premiums that marketplace enrollees are facing due to the expiration of the enhanced subsidies.”
Meanwhile, those availing job-based insurance might be asked to contribute more towards their employers’ rising health costs. Additionally, Medicare beneficiaries might experience changes to their prescription drug premiums after the Trump administration terminated a temporary program aimed at keeping these premiums under control.
What to Anticipate?
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The Affordable Care Act
Individuals securing health insurance through the ACA are poised for a second consecutive year of double-digit premium increases.
Per a KFF analysis of public filings from insurers across all 50 states and Washington, D.C, insurers offering ACA plans are proposing an average premium increase of about 15% for 2027, following a 20% average rate hike in 2026.
Levitt attributed the rising rates primarily to the increased cost of medical care, including higher prices for hospital stays, doctor’s visits and prescription drugs.
Job-based Health Insurance
About 165 million Americans receive health insurance via their jobs. Many of them might soon start noticing the price hikes.
According to a survey of more than 1,800 employers by Marsh, a benefits consulting group, employers anticipate an average 8.2% increase in the cost of providing health benefits to each worker in 2027 – the highest since 2003.
Medicare
The roughly 70 million people enrolled in Medicare cope with monthly premiums in a different manner.
Typically, Medicare beneficiaries deal with more than one premium: a premium for Part B, which covers doctor’s visits and other outpatient care, and for 90% of enrollees, a separate premium for Part D, which covers prescription drugs.
The most significant changes may arise from prescription drug costs, according to Yaver of the University of Pittsburgh.
However, in 2027, enrollees will still benefit from an annual cap of $2,400 on out-of-pocket expenses for prescription drugs.
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