ACA Premium Hikes Signal Broader Pressure on Private Health Plans

Action: An analysis of preliminary rate filings found that Affordable Care Act (ACA) Marketplace insurers are proposing a median premium increase of 14% for 2027 across 77 insurers in 16 states and the District of Columbia.¹

Trusted Insights for What’s Ahead^®

• If implemented, this would be the second consecutive year of double-digit ACA premium increases and would leave typical Marketplace premiums more than one-third higher over two years.
• This increase is more than double the projected increase for private insurers. The July 2026 KFF-Peterson analysis attributes the proposed increases primarily to core health care inflation, including higher hospital and physician prices, prescription drug spending, utilization, health care labor costs, provider contract increases, and more claims for severe conditions and injuries.
• The analysis also shows the effect of expiration of enhanced premium tax credits at the start of 2026.² Some enrollees have already left the Marketplace, and insurers expect additional healthier, more price-sensitive consumers to drop coverage during the 2026 open enrollment period, leaving a smaller, less healthy, and more expensive risk pool.
• Employers projected average health benefit costs to increase 6.7% in 2026, compared with a median 20% premium increase in the ACA Marketplace (gross premiums before subsidies).³ These figures are not identical: the employer figure measures the average increase in total health benefit costs (including employee premiums), while the Marketplace figure measures the median increase in insurance premiums alone. The ACA market is also uniquely affected by Federal subsidies and Marketplace rules.⁴ Nevertheless, both markets face many of the same underlying pressures, including provider prices, prescription drug costs, and utilization and pay for care from the same hospitals, physicians, and drug plans, albeit at differing rates.
• What this means for business:
  • The ACA Marketplace is not a direct proxy for employer plans, but its rate filings provide an early and detailed indication of cost pressures emerging across all health insurance markets, including private plans.
  • Rising ACA premiums are a warning signal for employer health benefit costs. Companies should not treat the proposed Marketplace increase as a direct forecast for projected increases for employer plans, but it is a meaningful indicator of broader private insurance cost pressures heading into 2027.
  • The impact of Marketplace premium increases would fall heavily on small businesses who purchase health insurance through the ACA’s Small Business Health Options Program (SHOP), including individuals and businesses with 1-50 full-time employees.⁵ One estimate suggests that about 5,000,000 small business owners and self-employed workers held Marketplace coverage at some point in 2025.⁶
  • Employers should anticipate continued pressure from provider prices, prescription drugs, GLP-1 demand, labor-related provider costs, and higher claims intensity.