TAMPA, Fla. – Health insurance premiums are set to surge next year as insurers request rate increases driven by rising prescription costs and a changing pool of policyholders.
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Proposed health premium rate changes
By the numbers:
The Kaiser Family Foundation predicts a 14% median increase in health insurance premiums for 2027.Â
Rate changes across the market will range from 4% to 40%, though most increases are expected to land in the mid-teens.
Out of 276 Affordable Care Act Marketplace insurers, 239 are asking for rate hikes between 5% and 20%.Â
Another 43 insurers are seeking increases exceeding 20%, while 13 small group insurers have proposed smaller adjustments between 0% and 5%.
Main drivers of cost increases
Big picture view:
Several factors are pushing coverage costs higher for everyday Americans. Prescription drugs—especially brand-name medications that lack generic alternatives—remain a primary driver.
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Glucagon-like peptide-1 (GLP-1) drugs, commonly prescribed to treat diabetes and obesity, are adding to the burden, causing rate hikes of 2.4% at one insurer alone.Â
Additionally, expenses tied to mental health and substance abuse treatment grew 20% over the last two years.
Political reform and market shifts
The backstory:
The Kaiser Family Foundation says a big part of the persistent problem is that after the credits which were approved during the COVID-19 pandemic expired, some healthier people decided to leave coverage on the table, which left a bigger pool of less healthy and older people who were left in the market.
That caused the market to be disproportionately covered by those who are more expensive to cover.
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