Affordable Care Act marketplace premiums are on course for a median 14% increase in 2027, according to a KFF analysis of 77 health plans' preliminary rate filings in 16 states and the District of Columbia. That would make back-to-back years of double-digit hikes in the individual market, arriving just as enrollment has fallen by roughly 3 million people to 19.2 million. The case for alarm is real. What complicates it is a market that still carries more enrollees than any year before 2024.
What's behind the spike
Two forces are at work, and neither is easy to solve. Insurers point to the expiration of enhanced ACA subsidies as a primary driver, but rising medical costs are doing at least as much work: the KFF analysis notes that the underlying cost of medical care and prescription drugs climbed 10% for 2027, above the 8% average growth seen over recent years. Coverage of GLP-1 weight-loss medications, other specialty drugs, and higher hospital costs account for much of that acceleration.
For enrollees earning above 400% of the federal poverty level (about $64,000 for a single person), no subsidy cushion exists. Higher premiums also push up the government's cost of subsidizing coverage for lower-income participants, so the fiscal read-through extends well beyond the individual market.
The adverse selection loop
The deeper structural problem is that the market is sorting in a direction that makes premiums harder to contain. Healthier, more price-sensitive enrollees are leaving as costs rise. The remaining pool skews sicker and more expensive to cover. Insurers estimate this dynamic added roughly four percentage points to premiums this year and expect a similar contribution in 2027. It is a self-reinforcing cycle: each round of exits worsens the pool, which pushes rates higher, which motivates the next round of exits.
"When you see a decline in enrollment coupled with such a big spike in premiums, neither of those are exactly comforting signs," said Emma Wager, a senior policy analyst for KFF's Program on the ACA.
The counterargument
The Trump administration disputes the framing around enrollment decline. An HHS report last month attributed a significant portion of the drop to a crackdown on improper and fraudulent enrollments, describing a "full-scale effort to ensure federal subsidies are going only to those for whom they are intended." On that reading, the headline enrollment fall overstates actual coverage loss. Wager herself acknowledged the market is "holding strong" for now, and 19 million enrollees exceeds totals from any year before 2024.
Democrats contest that account directly. Brad Woodhouse of the Democratic-aligned group Protect Our Care blamed "GOP-driven health care cost hikes" for what he described as "a mind-boggling number of Americans" joining the uninsured.
The line to watch
The clearest policy hinge is whether Congress moves to restore the enhanced subsidies, a prospect KFF frames as contingent on Democrats retaking control. The preliminary filings in this analysis are not final, and legislative action before open enrollment could shift the numbers. With underlying medical and drug costs running at 10% growth heading into 2027, the structural pressure does not resolve even if subsidies return. Enrollment at 19.2 million is the number to watch.