ACA Premium Increases Projected to Cut 1,500 Jobs and $60M in GDP

A premium hike that spreads through the economy

Discussions of Affordable Care Act premiums usually stop at the monthly bill. A new analysis from the economic modeling firm IMPLAN follows that money after it leaves the household. Released ahead of open enrollment for 2027 marketplace coverage, which starts November 1, the study estimates what happens when unsubsidized households pay for a 15% premium increase. Its answer is that the burden lands on businesses that have nothing to do with insurance, and also on the health care providers that coverage is supposed to support.11

IMPLAN projects that U.S. GDP would fall by roughly $60 million and that the economy would lose more than 1,500 jobs as families move spending away from other goods and services and toward premiums.11 Insurers come out ahead, gaining about $625 million in output and more than 1,300 jobs. Losses in housing, retail, restaurants, and health care outweigh those gains.11 The most striking result involves hospitals and physicians' offices. They are projected to lose about $55 million in business activity and around 240 jobs, roughly the same number of jobs restaurants would lose, because families paying more for coverage use less care.11

The main point holds even if the totals look small next to the size of the U.S. economy. When premiums go up, households do not buy more health care. They pay more for access to roughly the same care and then often use less of it.

The rate numbers behind the model

The 15% figure in the model is not hypothetical. A KFF review of filings from 276 insurers in all 50 states and the District of Columbia found a median proposed marketplace increase of 15% for 2027. That would be a second year of double-digit increases after a finalized median of 20% in 2026.2 The Commonwealth Fund calls these back-to-back increases the largest the marketplace has seen since 2018. They come after five years in which benchmark premiums rose only about 2% a year on average.1 Individual filings vary widely. Proposed changes run from a 1% cut to a 54% increase, and 51 insurers asked for more than 25%.7

Coverage of why rates are rising mostly agrees. According to the Center on Budget and Policy Priorities, insurers attribute about 10 percentage points of the increase to rising medical costs and about 4 points to the ripple effects of the enhanced premium tax credits expiring at the end of 2025.9 That second factor is the familiar adverse-selection problem. Healthier people drop coverage when prices rise, the remaining pool gets sicker and more expensive, and rates go up again.31 CNBC's reporting adds growing use of GLP-1 drugs, general inflation, and provider consolidation as cost drivers.2

Enrollment data shows the selection effect in action. KFF found that sign-ups fell 44% among people earning between 400% and 500% of the federal poverty level, the group just above the restored subsidy cliff. That band made up about 3% of 2025 enrollment but accounted for 27% of the decline in coverage.11 Overall marketplace enrollment fell by about 3 million from 2025 to 2026, according to federal data cited by AARP.4

Who actually absorbs the 2027 increase

The sticker increase and the amount enrollees actually pay are different numbers, and they matter for interpreting the IMPLAN model. Last year, net premiums after subsidies rose about 58% on average, even though many enrollees switched to cheaper bronze plans.3 This year will be different for most people. The underlying tax credit formula is not changing for 2027, so subsidies will grow to cover part of the gross increase.9 Since 87% of 2026 enrollees qualified for subsidies, the full increase falls mainly on people above the cliff and on anyone buying individual coverage outside the marketplace.3

IMPLAN deliberately models only that unsubsidized group.11 Some coverage of the study is less precise. Newsweek and outlets that republished its story describe the job losses as consequences of letting the enhanced subsidies lapse.1213 That is a reasonable political interpretation, but the model itself measures a 15% gross increase paid by unsubsidized households, not the full effect of the expiration. A separate analysis by the Commonwealth Fund and George Washington University addressed the expiration directly and found that nearly half of the resulting job losses would be in health care.12 The two studies support the same general conclusion, but readers should not combine their numbers.

The ideological split is also clear. The Paragon Institute argues that federal subsidies covered 86% of premium revenue in HealthCare.gov states in 2025. It says taxpayers have absorbed more than 90% of benchmark premium growth since 2014 for a typical subsidized enrollee, and that the enhanced credits contributed to improper enrollment.10 The Congressional Budget Office estimated that permanently restoring the enhanced credits would add $350 billion to deficits from 2026 to 2035 and increase the number of insured Americans by 3.8 million in 2035.12 The House passed a three-year extension in January 2026, but it stalled in the Senate. 2027 credits therefore follow the original ACA formula, including the hard cutoff at 400% of poverty.6

My view is that both sides are describing the same trade-off. The subsidies cost a lot. Removing them does not eliminate that cost. It moves part of it onto household budgets, local businesses, and providers, and the IMPLAN figures are one attempt to measure that shift.

The other half of the premium squeeze

The economic argument gets stronger when health coverage is considered alongside the rest of a household's insurance bills. NerdWallet's 2026 auto report found that median full-coverage premiums rose 32.3% between January 2023 and January 2026, from $1,784 to $2,359. Per-capita personal income grew 13% over the same period.22 Its home insurance study found that premiums for a typical home rose 24% over three years, to a median of $2,564. Midwestern homeowners and owners of older homes saw the largest increases.21 Bloomberg Intelligence reports that average home insurance premiums now exceed average property-tax bills in about two-thirds of U.S. counties, and in 75% of counties once weather-related auto costs are added.24

Personal property and casualty lines are clearly cooling. Auto rates rose only 2.6% in the latest year of NerdWallet's data, and the median filed auto rate change from January 2025 through mid-August 2026 was 0%.22 Home insurance increases slowed to 4.6%, with a median requested change of about 1% in 2026 filings.21 Insurify projects that car insurance costs will rise about 1% nationally in 2026.25 Regional exceptions remain, though. Beinsure points to New Jersey and Nevada as states still facing steep auto increases.

The two trends are moving in opposite directions. Auto and home insurers spent 2023 and 2024 repricing for inflation, repair costs, and severe weather, and they now appear to be close to adequate rates. Health insurance is in the middle of its own cycle. Employer plan costs are projected to rise 8% to 10% next year, the largest increase in more than two decades according to a Marsh survey.14 Small-group insurers are requesting a median 14% increase.11 Lower auto and home increases do not undo the earlier ones. They keep a higher cost baseline in place, and health premiums are now being added on top of it.

Why the spillover matters

KFF president Drew Altman argued last year that households experience premium increases as one more cost on top of food, housing, and utilities, not as a separate health policy issue. In one of his examples, a moderate-income couple's premium increase came to roughly three times their annual food bill.17 Survey data reflects that pressure on housing budgets as well. In a Zebra survey, 47% of homeowners said they would struggle to pay their mortgage if premiums went up.23 Those concerns are why IMPLAN's restaurant and retail job losses deserve attention.

There is a less obvious effect too. When the lowest-premium plan comes with higher deductibles, enrollees put off care.15 This pattern fits IMPLAN's finding that providers lose revenue. Georgetown researcher Erica Socker estimates that a family's combined premiums and out-of-pocket costs can reach about $10,000 a year in many cases.14

The $60 million GDP estimate is not a recession warning, and it should not be presented as one. Its value is in showing how the effects spread. Premium increases move money from many local businesses to a handful of insurers, and they reduce health care use rather than paying for more of it. Open enrollment begins November 1, and final 2027 rates are still subject to state review.11 The coverage points to a market caught in a self-reinforcing cycle, with costs that extend well past the households receiving the bills.