ACA insurance prices jump 13% as enrollment window opens

Health insurance premiums for the 2027 plan year are expected to rise by 13 percent on average, according to an analysis of new data from the Centers for Medicare and Medicaid Services by the Kaiser Family Foundation. This increase marks a sharp jump in costs for individuals purchasing coverage through federal and state exchanges.

The open enrollment period begins Sunday in most states and will run through January 15. Consumers entering this window face a marketplace that differs substantially from previous years due to changes in financial assistance and plan availability. The primary driver of the price hike is the expiration of enhanced subsidies that had kept costs low for many households during the previous administration.

Cynthia Cox, a vice president and director of the ACA program at KFF, identified rising healthcare costs and hospital market concentration as key factors behind the increase. She also cited the implementation of the No Surprises Act in 2022 and the growing availability of GLP-1 drugs as potential contributors to higher rates. These structural changes in the healthcare sector are pushing up the base price of coverage before subsidies are applied.

The burden of these increases falls heaviest on individuals who do not qualify for premium tax credits or cost-sharing reductions. Financial assistance is now restricted for groups that were previously eligible, leaving them to pay the full market rate. Cox noted that many of these unsubsidized enrollees have already shifted to bronze plans, which are the lowest-cost tier of coverage available on the exchanges.

"They may or may not be able to afford to continue to keep their coverage into next year," Cox said. She added that a large portion of this demographic has already moved into the cheapest plans available, suggesting limited room for further cost absorption without dropping coverage entirely.

Enrollment numbers have already declined due to the shift in subsidy policy. During the Trump administration's second term, Republicans opposed extending the temporary cost-sharing subsidies enacted under President Joe Biden. This policy change resulted in 1.2 million fewer people signing up for coverage in the exchanges compared to the peak enrollment years.

As of February, the Department of Health and Human Services reported that roughly 19.2 million people in the United States were actively enrolled in ACA marketplace health plans. This number grew during the pandemic when the American Rescue Plan Act and the Inflation Reduction Act provided enhanced subsidies. The current trend indicates a reversal of that growth as those temporary measures expire.

New regulations taking effect in 2027 will also limit tax credits for certain lawfully present immigrants. These changes could result in an additional 1 million individuals becoming uninsured over time. The administration has also been actively removing enrollees from the program in a campaign to address what it characterizes as waste, fraud, and abuse.

In September, Vice President JD Vance and other officials announced plans to remove 760,000 ACA enrollees from public healthcare exchanges. The administration alleged that these individuals were fraudulently enrolled or did not exist. Vance stated that canceling subsidy payments for hundreds of thousands of people would result in $2.2 billion in cost savings for the government.

A fact sheet distributed by CMS on Friday stated that Americans using HealthCare.gov would have access to low-cost plans. However, healthcare experts predict that the combination of higher premiums, stricter enrollment checks, and reduced subsidy eligibility will lead to fewer people remaining in the market. Cox said it will be difficult to understand the specific reasons for the decline in enrollment given the multiple concurrent factors at play.