Health insurance premiums jump for 2027 as auto, home rates cool

Health coverage costs are rising across employer plans, the ACA and Medicare

Health coverage is about to cost more in 2027 for nearly everyone who has it, whether it comes through a job, the Affordable Care Act marketplace or Medicare. The increases are not the same size across these three systems. Employer plans and the ACA market face the steepest increases in years. Medicare's main premium is going up only modestly, though its drug coverage is getting more expensive.

This is also happening as two other household insurance bills, car and home, are starting to level off after years of sharp increases. That split matters more than any single number. Heading into 2027, health insurance looks like the part of the household insurance budget most likely to keep climbing.

Employer plans: the biggest jump in more than two decades

About 160 million Americans get coverage through an employer, so this is where the increases reach the most people15. Benefits consultancy Marsh surveyed more than 1,800 employers and expects health benefit costs per worker to rise 8.2% on average in 2027. That would be the largest increase since 2003, and it already accounts for the steps employers plan to take to hold costs down11. Without those steps, employers expect their current plans would cost about 11% more14.

The other forecasts point the same way, though the numbers differ. Aon projects a 9.5% rise in employer costs, which would push average total plan spending above $19,000 per employee18. Aon also calls this the fourth straight year of high health-cost growth11. WTW's estimate is higher, at 11.1%16. The Business Group on Health, which represents large employers, puts the median increase before plan changes at 9.2%18. The forecasts disagree on how big the increase will be, but none of them shows employers getting relief. The realistic range for 2027 is somewhere between 8% and 11%.

Workers will feel much of this even though employers pay most of the premium. In 2025 the average family premium was $26,993. The worker paid $6,850 of that, and the employer paid about $20,1431. Marsh found that 59% of employers plan cost-cutting changes for 2027, such as higher deductibles11. In an earlier Marsh survey, about two-thirds of large employers said they expect to raise workers' share of premiums12. Some of the 2027 increase may therefore show up as higher costs at the doctor's office rather than as a bigger paycheck deduction. Over the past decade, KFF found, deductibles rose 54% and family premiums 53%, compared with overall inflation of 36%11.

The effects go beyond health budgets. KFF's Matthew Rae has warned that every extra dollar employers spend on health benefits is a dollar not available for wages, hiring or investment15. He also pointed to unusually high proposed rate increases for small businesses, and said some small firms may drop coverage entirely15. Insurers selling small-group plans have proposed a median increase of 14%18.

The ACA marketplace: a second year of double-digit increases

The marketplace is in the worst shape. KFF reviewed rate filings from 276 insurers and found a median proposed increase of 15% for 202711. That follows a median final increase of 20% for 2026, making this the second straight year of double-digit increases11. The Commonwealth Fund says these back-to-back increases are the largest the marketplace has seen since 2018. They come after five years in which the benchmark plan rose only about 2% a year13. Increases also vary widely by state, from under 7% in Vermont, Iowa and Utah to 29% in Arizona12.

The main cause is the policy changes behind the 2026 increases. The enhanced premium tax credits expired, and what enrollees actually pay each month jumped 58% on average, from $113 to $17811. Average deductibles reached a record $3,78611. The "subsidy cliff" is back: people earning more than 400% of the federal poverty level get no help. For 2027 coverage, that cutoff is $63,840 for an individual and $132,000 for a family of four17. About 1.6 million higher earners could end up paying the full increase themselves19.

Insurers' filings show what they expect next. Younger, healthier people are likely to drop coverage, leaving a smaller pool of older, sicker customers who cost more to insure1115. A Peterson-KFF analysis found that among insurers who built this into their prices, the sicker pool adds about 4 percentage points to 2027 increases7. The underlying cost of care, meaning hospital stays, doctor visits and drugs, rose by a median of 10% in those filings15. In other words, about two-thirds of the increase reflects higher medical prices, and the rest reflects policy choices that have pushed healthier people out of the market. Enrollees could end up paying 30% to 40% more than they did two years ago16.

The Commonwealth Fund points to another long-term risk: fewer insurers in the market13. The average number of marketplace insurers per state fell from 9.6 in 2025 to 9.0 in 2026. The number of counties with only one insurer grew from 93 to 1655. Less competition usually means higher prices, so the problem could feed on itself13.

Medicare: a smaller Part B increase, higher drug-plan premiums

Medicare is the exception, at least for its main premium. The Medicare trustees project that the standard Part B premium will rise about 3.25%, from $202.90 to $209.50 a month29. That would be a much smaller increase than the 9.7% jump in 202621. A year ago, the trustees had projected a 2027 premium of $218.60, so the new estimate is about $9 lower28. Social Security's cost-of-living increase is expected to be larger than the Part B increase, so most retirees should come out slightly ahead21.

That projection could still change. Several private forecasters expect the final premium to land between $215 and $219, noting that the trustees have underestimated recent increases28. CMS usually announces the official figure in November29. AARP also reports that the trustees expect Part B premiums to rise faster in the years after 202721.

Drug coverage is a less favorable picture. The base Part D premium rises 6%, to $41.33, which is the largest increase the law allows. The annual out-of-pocket cap on drug costs rises from $2,100 to $2,40012. CMS says most enrollees will pay less than $10 a month more. But administration figures reported by The Wall Street Journal suggest about 45% of people in stand-alone drug plans could see increases of roughly $11 to $20 a month12. The increase is linked to the administration pulling back from a temporary program that had held down Part D premiums20.

Why health costs keep rising

Analysts largely agree on the causes. Higher use of GLP-1 weight-loss drugs adds about 1 percentage point to employer cost growth in 2027, by Marsh's estimate11. High general inflation, healthcare staffing shortages and hospital systems buying up smaller practices all push prices up, because larger systems can demand higher payments from insurers11. A separate analysis found that rising prices, rather than more use of care, explained about 90% of recent employer cost growth3. That suggests the push to manage GLP-1 spending, while real, does not address most of the problem.

Car and home insurance are moving the other way

Car and home insurance tell a different story. NerdWallet found that the median car insurance premium rose 32.3% from January 2023 to January 2026, to $2,359. That is about two and a half times as fast as per-person income grew over the same period31. But the increase in the most recent year was only 2.6%. From January 2025 through mid-August 2026, the median rate change insurers filed with regulators was 0%31. Insurify reports that premiums fell 6% in 2025 and expects about a 1% rise in 202633. It also found rates rising again in 27 states during the first half of 2026, led by a 15% jump in Connecticut37.

Home insurance shows a similar slowdown. Premiums for a typical home rose 24% over three years, to a median of $2,564. Over the most recent year, though, the increase slowed to 4.6%, and the median increase insurers requested in 2026 filings was just 1%32. Some areas are still getting large increases. State Farm is raising Illinois homeowners' rates another 8%, after a 27.2% increase in 2025, and blames heavy storm losses40.

What it means

Read together, the coverage suggests that the main source of insurance cost pressure for households is moving away from car and home policies and toward health coverage. Property and auto insurers spent 2023 and 2024 raising prices to cover losses and now appear to have room to compete on price. Health insurers face the opposite: rising medical prices combined with federal policy changes that are shrinking the ACA market.

For consumers, the practical response is the same across all of these. Advisers recommend not letting plans renew automatically, checking that doctors and prescriptions are still covered, and comparing total costs including deductibles, not just monthly premiums12. Shopping around won't change the national trend, but with increases this large, the gap between the best and worst options available to a given household has probably grown.