Obamacare premiums going up next year - Here's why

Millions of Americans who buy their own health insurance through the Affordable Care Act marketplace could face another year of steep premium increases in 2027, as insurers point to rising medical costs, inflation and changes in federal policy.

A new analysis of insurer rate filings found the median proposed premium increase for ACA marketplace plans is 14% across 77 insurers in 16 states and Washington, D.C. If approved, it would mark the second straight year of double-digit increases after insurers sought an 18% median increase for 2026.

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The filings, submitted annually to state regulators, offer an early look at why insurers believe healthcare costs will continue climbing. While the proposed rates could change before they're finalized later this year, they suggest consumers may continue to see higher monthly premiums.

Why may premiums increase?

Dig deeper:

Rising healthcare costs remain the biggest driver

Insurers overwhelmingly cite growing medical expenses as the primary reason for raising premiums. Higher hospital bills, physician payments and prescription drug spending are pushing up the overall cost of care.

Across the filings analyzed, insurers projected a median medical cost trend of 10% for 2027, above the roughly 8% average reported in recent years.

Inflation and staffing shortages add pressure

Beyond healthcare-specific expenses, insurers also blamed broader economic conditions.

Several insurers also said hospitals and healthcare providers continue to face labor shortages that have increased wages and operating costs, leading providers to seek larger reimbursement increases during contract negotiations. Those higher costs are ultimately reflected in insurance premiums.

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Federal policy changes are affecting the market

Insurers also pointed to changes unique to the ACA marketplace.

The expiration of enhanced premium tax credits reduced enrollment in 2026, with insurers expecting healthier consumers to be more likely to drop coverage. That leaves a sicker insurance pool with higher medical costs, increasing pressure on premiums. Several filings also referenced recent federal marketplace rule changes as contributing factors.

More expensive claims and prescription drugs

Some insurers reported that claims are becoming more expensive because patients are receiving more complex care or providers are billing for higher-acuity services.

Prescription drugs, particularly GLP-1 medications used to treat diabetes and obesity, also remain a significant cost driver.

Some insurers said dropping coverage of weight-loss GLP-1 drugs has reduced spending, while others reported continued growth in the use of diabetes medications and other approved uses. One New York insurer said GLP-1 costs have more than tripled over the past two years.

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Other factors

A handful of insurers also cited hospital consolidation, which can give healthcare systems greater negotiating power over prices, as well as costs associated with the federal No Surprises Act dispute resolution process.

Premium requests vary widely by insurer, ranging from roughly 1% to more than 50%, although most proposed increases fall between 10% and 20%. None of the insurers included in the analysis proposed lowering premiums. Final rates are expected to be approved later this summer.

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