Health insurance premiums may rise significantly in 2027

Factors such as the increased use of GLP-1 drugs, the expiration of Obamacare enhanced subsidies, and high inflation rates in the United States are driving up costs across the health care system, and many consumers will face significant increases in health insurance premiums and cost-sharing next year, experts say.

This dynamic is straining household budgets at a time when they are already strained by broader affordability issues, which are key issues in the upcoming midterm elections.

“They can expect to pay more,” said Jonathan Oberlander, a professor of health policy and political science at the University of North Carolina at Chapel Hill. “Not only in terms of premiums, but also in terms of deductibles and copays.”

Most Americans under age 65 (approximately 166 million people) obtain health insurance through employer-sponsored health insurance.

Employers typically help cover the cost of health insurance for their employees by paying a large portion of the employee’s monthly premium payments. In 2025, the average worker paid $6,850 in annual premiums, while employers contributed more than $20,000 per worker, according to KFF, a health policy research group.

The cost of providing health benefits to employers will rise by an estimated 8.2% per worker in 2027, the largest increase since 2003, even after accounting for cost-cutting measures by employers, according to consulting firm Marsh.

Similarly, consulting firm WTW predicts that employer health care costs will increase 11.1% next year, the largest increase in more than 20 years.

Another consulting firm, Aon, predicts costs for employers will jump 9.5% in 2027. This is the fourth consecutive year of “increases” in health care costs and “extends one of the most sustained periods of health care cost inflation that employers have faced in decades,” the company said in an August press release.

As a result, employers are likely to pass some or all of the additional health costs onto workers in 2027, health policy experts say.

Total health care costs for workers, including premiums and other out-of-pocket costs, rose 7.9% in 2026 from a year earlier, the fastest annual pace in a decade, according to Aon. That percentage will likely remain the same in 2027, said Christy Labas, Aon’s senior vice president of health solutions.

Nearly six in 10 employers (59%) plan to make cost-saving changes to health benefits in 2027, such as increasing deductibles, Marsh said. The survey was conducted from June 10th to August 10th among more than 1,800 employers.

Experts say the move poses trade-offs for workers.

Higher deductibles could slow premium increases, they said, but it also means workers who must use insurance are exposed to higher bills later if they receive medical care.

“There are other ways that consumers are being squeezed,” said Matt McGaugh, Affordable Care Act policy analyst at KFF. “That doesn’t necessarily just show up in insurance premiums.”

According to KFF, growth in deductibles and family premiums has outpaced inflation over the past decade, rising 54% and 53%, respectively, compared to an overall inflation rate of 36%.

An additional 19.2 million Americans have health insurance plans through the Affordable Care Act marketplace, according to figures released in June by the U.S. Department of Health and Human Services.

Participants are typically self-employed, gig workers, early retirees, small business owners, and others who do not have health insurance through their workplace or federal programs such as Medicare or Medicaid.

Insurers participating in the ACA market have proposed a median 15% increase in consumer premiums in 2027, according to KFF’s analysis. That’s the median increase for 276 insurers based on state regulatory filings detailing their outlook for next year.

If finalized, it would be the second consecutive year of double-digit premium increases for Obamacare enrollees, according to KFF. It found that the median increase proposal rate nationwide last year was 18%, and the median final decision rate was 20%.

Overall, participants’ premiums would increase by 30% to 40% in just two years, McGough said.

Experts say that in most cases, consumers can be largely insulated from that premium shock.

Many Obamacare enrollees receive premium tax credits (also known as premium subsidies) that reduce health insurance premiums. Recipients’ total premiums are limited to a certain percentage of their income, with the federal government covering the difference.

“The vast majority of people are subsidized in the marketplace,” Oberlander said. “This kind of increase in premiums is basically considered harmless.”

However, there are some caveats. ACA participants with incomes above 400% of the federal poverty line must pay full unsubsidized premiums.

Oberlander said the sharp increase in healthcare spending for employers and workers comes after about two decades of “relatively slow” growth in U.S. healthcare spending.

Of course, consumers may not have felt the growth rate was constrained, he said. That’s because cost standards were already very high, he said.

“No one really celebrated this event, but it could have been a bigger deal for consumers,” he says.

Oberlander said it’s unclear whether the increases over the past two years signal the beginning of the end of an era of slow health spending growth, but he said it “is going to be a big problem.”

There are many reasons for the rapid increase in healthcare costs.

Perhaps the most impactful recent development is the use of GLP-1 drugs for weight management, said Sunit Patel, chief U.S. actuary at Marsh. He said the company estimates that “increased GLP-1 utilization” will account for 1 percentage point of overall employer cost growth in 2027.

He said some employers seeking “immediate cost savings” have chosen to discontinue coverage of GLP-1 drugs next year.

McGaugh said that inflation rates across the U.S. remain high, also pushing up costs across the health care system. Insurers’ costs are rising, he said, and they are compensating by increasing premiums. Labor shortages in the medical field are also pushing up wages and exacerbating inflation, he said.

Consolidation of health care services, such as a large hospital system acquiring a smaller medical practice, also drives up prices, McGaw said. This is because larger organizations have more bargaining power with insurance companies to set reimbursement rates.

McGaugh said that in the Obamacare market, insurers are raising premiums for enrollees due to expiring enhanced premium subsidies and other policies included in the so-called “Big and Beautiful Bill” passed by the Republican majority in Congress.

These policies have made it more expensive for consumers to maintain insurance, he said.

Most ACA participants saw their premiums jump from 2025 to 2026 after the premium tax credit enhancements expired.

Premium payments from ACA enrollees jumped an average of 58% in 2026, from $113 per month to $178 per month, according to KFF. The average ACA Marketplace deductible increased by 37%, or $1,027 per person, to an all-time high of $3,786 in 2026, it found.

Experts say insurers are raising premiums for 2027 because they expect many young, healthy people to drop their insurance plans, leaving older, sicker people behind with higher premiums.

Oberlander said rising health care costs could affect households’ voting choices in the upcoming midterm elections, which are about a month away, and the 2028 presidential election.

“If you look at the surveys, people are very upset about health care affordability and their ability to pay for health care,” he said.

In a January KFF poll, 43% of voters said health care costs would have a “significant” impact on which candidate they supported in the midterm elections.

According to the KFF poll, Democrats hold a double-digit lead over Republicans when it comes to who voters say they trust to handle health care costs (40% vs. 27%).

“I think it’s going to be a bigger issue in 2028[during the presidential campaign]than it was in 2026, because there are so many other issues right now, including the Iran war,” Oberlander said.