Most Americans are likely to see a noticeable rise in their monthly health insurance costs next year, regardless of whether they get their coverage through their employer, the Affordable Care Act, or Medicare. In some cases, these premium hikes could be the largest seen in decades due to various economic pressures. However, the impact won’t be uniform; some individuals may experience higher copays or deductibles instead of outright premium increases.
“Healthcare costs are escalating at a rate we haven’t seen in quite some time, and the open enrollment period will truly highlight the healthcare affordability crisis for many,” noted Larry Levitt, who is a key figure in health policy at KFF, an independent research organization. “This applies to whatever type of insurance you have.”
Indeed, prices seem to be climbing in nearly every aspect of daily life.
The surge in healthcare expenses is partly due to rising costs for hospital services and medical care, alongside the growing utilization of expensive prescription medications—like the GLP-1 drugs associated with weight loss—that are increasing spending for both insurers and employers.
The challenges faced differ based on the type of health coverage people have.
Individuals who purchase insurance through the Affordable Care Act (ACA) marketplace—approximately 19 million adults—should prepare for another year of significant premium increases, especially following the expiration of enhanced federal subsidies last year.
Recently, the White House announced plans for $500 rebate checks for an estimated 1 million ACA enrollees, claiming they were incorrectly overcharged. However, there is uncertainty regarding the source of these rebate funds, or whether Congress would need to approve the distribution; experts are doubtful this will offer meaningful assistance.
The $500 rebate “is minor compared to the premium increases that marketplace enrollees are facing after the enhanced subsidies expired,” explained Miranda Yaver, a health policy and management assistant professor at the University of Pittsburgh.
Moreover, workers with employer-sponsored insurance might find themselves needing to contribute more to cover their employers’ escalating health costs. Meanwhile, some Medicare recipients could see alterations in their prescription drug premiums, particularly after the previous administration’s termination of a temporary program designed to regulate those costs.
So, what can people expect?
The Affordable Care Act
Individuals purchasing health insurance via the ACA are set for their second consecutive year of double-digit premium hikes.
According to a KFF analysis based on insurer filings from all 50 states and D.C., insurers offering ACA plans are proposing an average premium increase of around 15% for 2027. In 2026, the average increase had already reached about 20%.
A person earning $80,000 annually and ineligible for standard ACA subsidies may see their bronze plan costs—the most budget-friendly option—rise by about $80 monthly, translating to nearly $1,000 more each year.
Levitt attributes much of these hikes to the rising costs of medical services. Insurers have indicated that hospital stays, doctor visits, and prescription drugs are all becoming pricier.
They have also felt compelled to cover weight-loss drugs like GLP-1 medicines, but the costs for these medications are spiking as well, Levitt mentioned.
The ACA marketplace continues grappling with the aftermath of enhanced federal subsidies ending at the close of 2025. These subsidies had significantly decreased monthly premiums for millions of middle-class families during the pandemic. Following their expiration, many people either faced much higher costs in 2026 or opted for lesser coverage.
This subsidy lapse has also attributed to about 3 million fewer enrollees in the ACA marketplace.
Young adults, generally healthier and more likely to forego insurance when it becomes too costly, represented a large share of this enrollment drop. This demographic shift has left insurers with a customer base that, on average, requires more medical care, which is reflected in next year’s rates.
Job-based health insurance
About 165 million Americans receive health insurance through their jobs, and many of them will likely feel these rising costs.
Employers are expecting the expense of health benefits per employee to climb by 8.2%, the highest jump since 2003, according to a survey conducted by Marsh involving over 1,800 employers.
However, this doesn’t necessarily mean that worker premiums will also rise by 8.2%, cautioned Dr. Kevin Schulman from Stanford University, who studies employer-based health insurance.
Employers often foot a substantial portion of employee health coverage costs. But when healthcare expenses rise dramatically, they have various strategies to pass on some of those hikes to employees. This could come in the form of increased monthly premiums or higher deductibles, and sometimes, it might even mean decreased wage growth to counterbalance expenses.
“As costs keep climbing, employers look to manage that growth, and one of the simplest ways is to push more expenses onto their workers,” Schulman pointed out.
It appears many employers are ready to take such actions.
Around two-thirds of larger employers—those employing 500 or more people—indicated in the Marsh survey that they expect to boost employee contributions toward premiums in 2027.
Others might adjust costs in different manners, such as eliminating copays and deductibles for primary care visits but charging for other types of care, or maintaining premiums while increasing deductibles.
For employees, this means it’s crucial to look beyond just the premium price during the open enrollment period, Schulman emphasized. A plan that appears cheaper each month might actually feature a higher deductible or more out-of-pocket costs when seeking healthcare.
Medicare
Monthly premiums for Medicare, which roughly 70 million individuals rely on, are structured somewhat differently.
Those on Medicare typically need to consider multiple premiums, including for Part B—which covers outpatient care—and, for 90% of enrollees, a separate premium for Part D, which addresses prescription drug costs.
According to Yaver, these prescription drug costs could see the most significant increases.
The Centers for Medicare & Medicaid Services projected in July that the baseline monthly cost of Part D coverage will rise about 6% in 2027, from $38.99 to $41.33.
Ultimately, what individuals pay may vary based on their income level and specific plan details.
This increase is partly attributed to the previous administration’s decision to withdraw support for a temporary federal program that was instrumental in managing premium increases for Part D plans, which began in 2025 when Medicare’s drug benefits underwent significant revisions under the Inflation Reduction Act. Without this program, enrollees might have seen their monthly premiums nearly double.
Yaver expressed concern regarding the impact on seniors, highlighting that the program had reduced the average premium by 40% the previous year, and many seniors often live on fixed incomes.
“Even though seniors typically don’t switch their Part D plans very often, this year could be different, potentially leading them to choose lower-quality options and leaving them more vulnerable,” she remarked.
Despite these changes, enrollees will still have an annual out-of-pocket maximum on their prescription drug expenses, which will be $2,400 in 2027.
