If you buy your own health insurance, brace yourself: 2027 is shaping up to be the second straight year of double-digit premium increases.

According to a new analysis from KFF and the Peterson Center on Healthcare, ACA Marketplace insurers are proposing a median 14% premium increase for 2027 — on top of the roughly 20% median increase consumers absorbed this year. To be clear, these are preliminary rate filings from 77 insurers across 16 states and D.C., and state regulators can still push back before rates are finalized this fall. But the direction is unmistakable, and the reasons behind it tell us a lot about where the individual insurance market is headed.

Here are the three forces driving the spike.

1. Medical and drug costs keep climbing

The biggest single factor is the one that never goes away: the rising cost and use of medical care. Hospital prices, physician services, and outpatient care all continue to grow faster than general inflation.

Layered on top of that is surging demand for expensive specialty medications — most notably GLP-1 drugs like Ozempic, Wegovy, and Zepbound. These medications can run over $1,000 a month per patient, and as prescribing expands for weight loss and related conditions, insurers are pricing that demand directly into next year's premiums.

2. The enhanced subsidies are gone

For four years, enhanced premium tax credits — first passed during the pandemic — capped what most Marketplace enrollees paid, and extended help to middle-income households for the first time. Those enhanced credits expired at the end of 2025.

The math changed overnight. Enrollees below 400% of the federal poverty line still receive some subsidy, though less generous than before. But consumers above 400% of the poverty line — about $62,600 for an individual — now receive no subsidy at all. For them, every point of premium increase hits at full price. A 14% hike isn't softened by anything; it comes straight out of pocket.

3. A smaller, sicker risk pool

This is the driver that worries me most, because it feeds on itself.

When premiums jumped this year, roughly 3 million fewer people enrolled in Marketplace coverage compared to the year before. And the people who drop coverage first are, predictably, the healthiest ones — the enrollees who look at the new price, decide they can risk going without, and walk away.

That leaves behind a pool that is smaller and sicker on average. Insurers, anticipating higher per-person costs, raise premiums again. Those higher premiums push out the next tier of relatively healthy enrollees. Actuaries call this adverse selection; in plain terms, it's a spiral — each round of increases makes the next round more likely. Insurers have said plainly in their filings that they expect the market to keep deteriorating in 2027 for exactly this reason.

What this means for you

If you buy your own coverage: Don't auto-renew. When 2027 rates are finalized, shop the full menu of plans in your area — increases vary widely by insurer and metal tier, and switching plans is often the single biggest lever you have. If your income is anywhere near the 400% FPL line, careful income planning (retirement contributions, HSA contributions) can matter more than ever.

If you're an employer or benefits professional: The individual market's troubles don't stay contained. Watch for pressure on ICHRA strategies, COBRA alternatives, and early retirees who rely on Marketplace coverage as a bridge to Medicare.

If you're watching policy: The single biggest variable is whether Congress revisits the enhanced subsidies. Restoring them would pull healthier enrollees back into the pool and blunt the spiral. Absent that, expect the 2027 story to repeat in 2028.

The bottom line

A 14% proposed increase is a headline number, but the mechanism underneath it matters more. Rising care costs are a chronic condition; the subsidy cliff and the shrinking risk pool are acute ones — and they're policy choices, which means they can be unmade. Until then, the people with the least cushion are the ones above 400% of the poverty line, paying sticker price in a market that gets more expensive precisely because people like them keep leaving it.

Final 2027 rates will be locked in this fall. If you're going to act — shop plans, restructure income, or rethink your benefits strategy — the window is now.

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Sources: KFF, Preliminary 2027 Rate Filings Analysis (July 2026); Peterson-KFF Health System Tracker