A median rate increase of about 15 percent is on the table for Affordable Care Act marketplace plans in 2027, marking the second consecutive year insurers have asked regulators for double-digit hikes. The run-up traces back to a single policy change: the enhanced premium tax credits that had capped many households’ payments expired at the end of 2025, and the market has been repricing around that loss ever since.
What the 2026 numbers already showed
The enhanced credits, first created under the American Rescue Plan and extended through 2025, had capped what many marketplace enrollees paid regardless of income. Once they lapsed, the effect showed up immediately in 2026 enrollment data: premium payments rose, sign-ups fell, and many enrollees quietly downgraded to cheaper, thinner coverage rather than pay the difference.
KFF’s analysis of the 2026 plan year found that the average monthly premium payment net of tax credits rose 58 percent, from $113 to $178, while plan sign-ups fell by more than a million people, the sharpest single-year drop since the marketplaces launched in 2014. Average deductibles jumped 37 percent to a record $3,786 as many enrollees shifted into cheaper, high-deductible bronze plans to offset the higher premiums. People with incomes just above the old subsidy cutoff accounted for a disproportionate share of the people who left coverage altogether rather than pay full price: that group made up just 3 percent of 2025 sign-ups but 27 percent of the drop in coverage the following year, and their plan selections fell 44 percent, a loss of more than 321,000 people in that income band alone. Younger, generally healthier adults also left at a higher rate than older enrollees, which tends to make the remaining pool of policyholders more expensive to insure on average.
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What insurers are asking for going into 2027
With 2026 enrollment data now showing a smaller, costlier risk pool, insurers built that shift into their 2027 rate requests. KFF’s review of preliminary filings from all 50 states and Washington, D.C. put the median proposed increase at about 15 percent, down slightly from the prior year’s finalized median of 20 percent but still a second straight year of double-digit requests. Carriers cite rising medical and prescription costs, including specialty drugs, alongside the continued absence of the enhanced credits, as the main drivers. State insurance regulators still have to review and finalize these filings before open enrollment begins, so the final numbers by state can move from what insurers initially proposed. Last year’s finalized median of 20 percent already ran below what many analysts had projected once the enhanced credits lapsed, partly because a large share of enrollees responded by downgrading to cheaper bronze plans rather than absorbing the full premium increase on their existing coverage, a pattern insurers are again building into how they expect 2027 enrollment to shake out.
Fewer insurers are also making the same math
The subsidy cliff is not only showing up in price; it is reshaping who sells ACA plans at all. KFF’s tracker of insurer participation, updated September 15, counts nine carriers announcing 2027 exits against six announcing new-state entries, with the expiration of the enhanced credits cited as the trigger for the wave of departures. Cigna’s decision to leave the individual market in all 11 states where it operates is the largest single exit tracked so far, driven by the same enrollment contraction showing up in the premium and deductible data. Fewer competing insurers in a given county typically means less competitive pressure on the prices that do survive regulatory review, compounding the effect of the credits’ expiration rather than offsetting it. Six insurers are moving in the opposite direction, entering new state markets for 2027, but KFF’s tracker counts more exits than entries overall, which means the net effect heading into open enrollment is a marketplace with somewhat fewer choices layered on top of the higher asking prices.
When a tax credit expires and premiums rise
A premium increase that traces back to an expired tax credit still has to be absorbed somewhere in a household budget, often through a higher-deductible plan, a skipped prescription refill, or a switch to a plan with a narrower network. The programs meant to soften exactly that kind of cost shift are scattered across separate agencies with separate paperwork.
The Medicare Cost & Coverage Protection Kit is a 10-page kit covering the new Part D out-of-pocket cap and the prior-authorization appeal steps, along with 51 state Medicare cost-help packs.
Open the coverage kit at The Medicare Cost & Coverage Protection Kit.
This article was researched and drafted with the assistance of AI and reviewed by an editor.
David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
