ACA premium shock: Health insurers request hikes up to 30% for 2027

Consumers and small businesses could face a substantial financial burden in 2027, as major health insurance providers officially submit rate requests seeking steep premium increases of up to 30%.

Soaring medical service costs and the expiration of pandemic-era federal premium subsidies are driving the steep rate hike requests. Some state officials are pushing back on the rate hike proposals.

In Connecticut, ConnectiCare Benefits filed for an average 22.7% increase on individual plans, while Anthem requested a 17.4% jump for small group employers. UnitedHealthcare filed a proposal for small-group plans that would be offered exclusively off the exchange, seeking an average increase of 18.9%.

State law requires the Connecticut Insurance Department to determine whether the requested rates are “excessive, inadequate, or unfairly discriminatory,” noted William Tong, state attorney general.

“These double-digit demands are unaffordable, excessive, and unacceptable, and we’re going to scrutinize every page of these applications,” Tong said in a statement. “Year after year, insurers pad these rates with fuzzy math, double-counted costs and unsupported assumptions.”

Health insurers “are going to need to explain why they remain utterly unwilling and unable to use their leverage to negotiate with healthcare providers and drive down these runaway healthcare costs,” Tong added.

Connecticut saw a decrease in the number of rate filings because UnitedHealthcare and ConnectiCare have each notified regulators of planned internal "insurer consolidations. Both companies will remain active in Connecticut’s health insurance market, the Connecticut Insurance Department said, and consumers will continue to have coverage options available from these companies for the 2027 plan year.

Anthem, ConnectiCare and UnitedHealthcare for individual and small group plans covering approximately 220,000 people across Connecticut.

Hikes sought across the country

Here is a look at select rate hike requests from other states:

Washington: Thirteen health insurers requested an average individual market rate increase of 22.4%.

Maine: State Bureau of Insurance filings reveal proposed individual plan rate spikes reaching as high as 32%.

Massachusetts: Carriers proposed a 12.9% average increase, with Fallon Community Health Plan leading at a 25.7% request.

District of Columbia: CareFirst and Kaiser Permanente filed for rate hikes of 8.6% and 10%, respectively, in the individual market, along with similar increases in the small group market. Also in small group, UnitedHealthcare proposed average increases of 25% for its two HMO products and for its PPO/insurance plan.

Enhanced Affordable Care Act premium tax credits, in place from 2021 to 2025, expanded marketplace affordability and drove enrollment to record highs. Their expiration at the end of 2025 caused premium payments to surge. This sharp increase primarily hit enrollees earning above 400% of the federal poverty level, who lost their subsidy eligibility entirely.

The Commonwealth Fund analyzed the impact of the subsidy cuts in a blog post this week and reported a “bleak” picture.

This year, sign-ups during open enrollment fell by 1.2 million, a 5% drop from the prior year, the largest decline in any year since the marketplaces opened in 2014. Several state-based marketplaces have released early data indicating that plan cancellations rose sharply between January and March this year — up 24% over last year.

Meanwhile, many Americans dropped down a coverage tier, resulting in fewer benefits and causing the average marketplace annual deductible to increase by $1,000 in 2026, to nearly $3,800.

Analysts expect 2026 marketplace enrollment to decline 17 percent to 26 percent from last year, dropping by around 5 million people. Coverage losses will likely increase in 2027 as further federal cuts to subsidies and new enrollment barriers take effect.

'Each and every year'

The DC Department of Insurance, Securities and Banking received 181 proposed health insurance plan rates for annual review, the office said in a news release. It promised a “rigorous, data-driven review” to ensure that premiums are justified.

“As we evaluate the 2027 filings, our priority remains clear: protecting consumers, promoting affordability, and upholding the Bowser Administration’s commitment to a fair and competitive insurance market,” said DISB Commissioner Karima Woods.

During recent first-quarter earnings calls, health insurance CEOs stated that medical cost trends remain highly elevated, prompting companies to prioritize profit margin recovery, aggressive claims reduction strategies, and benefit cuts when drafting their 2027 plan structures.

Executives across major carriers detailed how government funding pressures and shifting consumer dynamics are making for tough financial decisions for 2027.

"You still have to come back and say, 'OK, but what are the changes that you have to make to benefits in order to get to your target margin, so in order to get to a sustainable, durable, attractive long-term margin that gives us an appropriate return on capital?'" Humana CEO Jim Rechtin said. "That's the logic you're going through each and every year."

Connecticut Insurance Commissioner Josh Hershman said the cost drivers require cooperation from across the healthcare system.

"Providers, hospital networks, pharmaceutical manufacturers, pharmacy benefit managers, insurers, and policymakers all have a responsibility to help address the factors driving costs,” he said in a statement.

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InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.