Subsidy Expiry Triggers 13% ACA Premium Surge

The Affordable Care Act marketplace opens Sunday, ushering in a cycle of higher premiums and reduced coverage options for 2027. The sign-up window runs through Jan. 15 in most states. Enrollees face expiring financial aid, rising rates, and new restrictions on who qualifies for subsidies.

Average health insurance prices on the exchange are expected to rise by 13% in 2027, according to analysis of new CMS data by the healthcare research nonprofit KFF. Cynthia Cox, a vice president and director of the ACA program at KFF, cited rising healthcare costs and hospital market concentration as primary drivers. She also noted the impact of the No Surprises Act, which took effect in 2022, and the growing availability of GLP-1 drugs.

Those without subsidies feel the weight of these increases most directly. Cox said many affected individuals have already shifted to bronze plans, the cheapest tier available. "They may or may not be able to afford to continue to keep their coverage into next year," Cox said.

Premiums have climbed sharply during the current administration after Republicans opposed extending pandemic-era subsidies. Those subsidies had previously offset costs for most enrollees. The change resulted in 1.2 million fewer people signing up for coverage on the exchanges.

As of February, roughly 19.2 million people were actively enrolled in ACA marketplace plans, according to the Department of Health and Human Services. Enrollment grew during the pandemic when enhanced subsidies were authorized through the American Rescue Plan Act and the Inflation Reduction Act.

New regulations for 2027 will limit tax credits for certain lawfully present immigrants. This change could leave an additional 1 million people uninsured over time. The Trump administration is also removing enrollees from the program in a campaign against waste, fraud, and abuse. In September, Vice President JD Vance and other officials announced plans to remove 760,000 enrollees, alleging fraudulent enrollment or nonexistence. Vance stated that canceling subsidy payments for these individuals would save $2.2 billion.

A CMS fact sheet distributed Friday claims that Americans using HealthCare.gov will have robust access to low-cost plans. Cox noted that it remains unclear how many more people will drop coverage in 2027. She predicted that fewer people will be enrolled in the market, though the reasons for the decline may be harder to distinguish.