Another hit to the wallet: Why health care price increases are expected in 2027
Rising health premiums expected in 2027
Americans are bracing for increases in health insurance premiums. Studies show that increases will range from four percent to forty percent, with the bulk of increases likely to be in the mid teens. FOX 13's Evan Axelbank reports.
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.
Proposed health premium rate changes
By the numbers:
The Kaiser Family Foundation predicts a 14% median increase in health insurance premiums for 2027.
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%.
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.
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.
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.
The Source: The information in this story was gathered from a report by the Kaiser Family Foundation detailing proposed ACA Marketplace rate changes, as well as historical policy data on federal health care legislation.