Middle-income Americans already struggling to afford health insurance face another punishing blow next year, with insurers proposing a second consecutive year of double-digit premium hikes that'll hit families earning too much to qualify for subsidies the hardest.
Across 77 insurers in the Affordable Care Act marketplace that have submitted publicly available rate filings, the median proposed premium increase for 2027 stands at 14%, according to an analysis released Wednesday by the healthcare research nonprofit KFF. That comes on top of a brutal 20% median rate increase this year, compounding affordability challenges for households caught in the middle.
Who Bears the Burden
The steepest pain falls on middle-class enrollees who don't qualify for subsidies — households with incomes at or above 400% of the poverty level, roughly $63,000 annually for an individual or $129,000 for a family of four. While most Americans in Obamacare still receive subsidies that shield them from paying full premiums, this group faces the full brunt of rising costs without any cushion.
Insurers cited mounting healthcare costs, federal regulatory changes, and the expiration of pandemic-era enhanced subsidies as the biggest factors driving premiums higher. The analysis examined rate filings across 16 states and Washington, D.C., measuring premium increases as an average across bronze, silver, gold, and platinum plans.
The Subsidy Cliff's Impact
The expiration of federal subsidies in January triggered a cascade of consequences that insurers say is now driving costs upward. When those tax credits disappeared, plan costs skyrocketed for many enrollees. That prompted large numbers of people to leave the marketplace, leaving behind a sicker patient population that carries higher risks and costs.
New state-by-state data posted by the Trump administration shows the ACA marketplace shrunk by more than 2.5 million people over the past year. Some states saw declines amounting to nearly a third of their enrollee population.
Stacey Pogue, a senior research fellow at Georgetown University's Center on Health Insurance Reforms, said the enrollees most affected by rising premiums will be those who don't qualify for financial help. She noted these same people already saw the most significant increases this year, with some premiums doubling or tripling.
"Those are the folks who kind of got a double whammy" this year, she said.
Market Dynamics Worsening
Insurers listed rising costs across the healthcare sector — from hospital visits to prescription drugs, the workforce, and sicker patients — as the biggest cause of rising premiums. Overall inflation contributed to that pressure, driving prices higher across the entire economy.
Some insurers added that federal regulatory changes contributed to their requests for higher premiums, including new enrollment and eligibility requirements instituted by the Trump administration that could affect the overall population of ACA enrollees.
Pogue said the rate filings demonstrate what many analysts had expected: that the expiration of enhanced tax credits would cause healthy Americans to flee the marketplace and leave a sicker patient population that relies more heavily on insurance.
"When the healthy people leave, the prices go up," she said. "The analysts all predicted that, and now that's what we're seeing."
Georgetown University's Center on Health Insurance Reforms published an analysis of preliminary ACA insurer rate filings last month that, like KFF's, projected double-digit premium increases in the marketplace next year.
Broader Implications
While Affordable Care Act enrollees make up less than 10% of the population, similar cost drivers are likely to make other private plans pricier too, including employer-sponsored plans, according to KFF's analysis. The higher costs contribute to Americans' existing worries about overall affordability, a concern that many voters say is front of mind with November's midterm elections looming.
Health insurers must send filings to regulators every year, explaining what they expect to see in premium rate changes for individual market health plans for the coming year. Next year's rates will be finalized later in the summer.
The rate increases come as federal lawmakers have proposed various policy changes to overhaul the expensive U.S. healthcare system, but no comprehensive legislation has amassed enough support to pass.
Why This Matters:
The compounding premium increases expose a fundamental weakness in America's healthcare safety net: middle-class families who earn too much for subsidies but not enough to comfortably absorb annual double-digit cost increases are being priced out of coverage. When the marketplace loses healthier enrollees because they can't afford premiums, it creates a downward spiral that drives costs even higher for those who remain and desperately need coverage. The shrinkage of more than 2.5 million enrollees demonstrates that without adequate subsidies, the individual insurance market becomes unsustainable for working families. This affordability crisis affects not just ACA enrollees but signals broader cost pressures across employer-sponsored plans that cover most Americans, threatening to leave millions more people underinsured or uninsured at a time when healthcare access should be expanding, not contracting.