Outrunning Inflation Again: Why 2027 Health Insurance Costs Demand a Prepared Patient

Health insurance premiums rise every year. That is not news. What is different now is the pace. Health costs are climbing much faster than inflation and wages, the gap will widen again in 2027, and families are already being priced out of coverage and care. This is not sustainable.

Health costs are pulling away from inflation and wages

Consumer prices overall rose about 4.2 percent over the past year, according to the Bureau of Labor Statistics, and core inflation sat near 2.9 percent. Hourly wages grew roughly 3.6 percent. Now compare the health side of the ledger. KFF's analysis of preliminary 2027 rate filings from 77 ACA Marketplace insurers across 16 states and Washington, D.C. found a median proposed premium increase of 14 percent, following a finalized median increase of 20 percent in 2026. PwC projects a 9 percent medical cost trend for employer group plans in 2027, the highest in 17 years. Mercer reports employer health benefit costs rising 6.7 percent this year, the largest jump in 15 years, and states plainly that health benefit costs are rising much faster than inflation and wage growth.

Put simply, health insurance is claiming a larger share of family income each year. When premiums grow at two to three times the rate of wages, year after year, the arithmetic eventually breaks. Families are living that breaking point now. Georgetown University's Center on Health Insurance Reforms found that people who lost subsidies in 2026 saw some premiums double or triple. ACA enrollment has already fallen by nearly 3 million people, and federal data shows the cost spike pushing more consumers into high-deductible plans that leave them exposed when illness strikes.

Which plans will see increases in 2027

ACA Marketplace (individual) plans. These face the sharpest hikes, across every metal tier from bronze to platinum. Most insurers are requesting increases between 10 and 20 percent, and 20 insurers are asking for more than 20 percent. State regulators are confirming the pattern: Washington's 13 individual-market insurers requested an average increase of 22.4 percent, Maine filings from Anthem run as high as 26 percent, and Connecticut requests range from 12.8 to 22.7 percent. Households earning above 400 percent of the federal poverty level, roughly $62,600 for one person, will feel the full increase because they lost premium subsidies when the enhanced tax credits expired at the end of 2025.

Employer-sponsored plans. Two thirds of large employers surveyed by Mercer expect to raise the premiums workers pay through paycheck deductions in 2027, and nearly half plan changes such as higher deductibles and copays. Employees in rich PPO plans who use care frequently could see costs rise by as much as 8 percent.

Fewer choices, too. At least six insurers, including Cigna, CareSource, PacificSource, Baylor Scott and White, Providence Health, and Mending, will exit ACA Marketplaces in 2027, requiring roughly 650,000 people to choose new plans.

Behind the numbers, insurers cite rising hospital and physician costs, expensive GLP-1 and specialty drugs, healthcare labor shortages, and a Marketplace risk pool that got smaller and sicker after healthier enrollees dropped coverage when their out-of-pocket premiums jumped an average of 58 percent in 2026.

The Prepared Patient mindset

The central argument of my upcoming book, The Prepared Patient, is that in a system this expensive and this complicated, preparation is protection. Most families spend more time researching a television purchase than a health plan that will cost them thousands of dollars and shape their access to care. Understanding how insurance works, and acting before deadlines rather than after bills arrive, is one of the few levers ordinary people control. For those who have a choice of plans, that knowledge turns a confusing ritual into a genuine financial decision. Here is how to apply it before 2027 rates take effect.

If on a Marketplace plan, shop during open enrollment, even if you like your current plan. Open enrollment for 2027 Marketplace plans begins November 1. With insurers exiting and rates shifting unevenly, last year's best value may not be this year's. Compare total expected cost, meaning premiums plus deductibles and copays for the care you realistically use, rather than premiums alone.

Know your subsidy math. Most Marketplace enrollees still qualify for the ACA's standard premium tax credits. If your income sits near the 400 percent threshold, small changes matter enormously. Contributions to a traditional IRA, 401(k), or Health Savings Accounts (HSAs) can lower your modified adjusted gross income and may restore eligibility. A licensed navigator or benefits advisor can help you run the numbers.

Use tax-advantaged accounts. If you choose a high-deductible plan, fund an HSA if you can. Contributions reduce taxable income, grow tax free, and pay for qualified medical expenses. Flexible Spending Accounts (FSAs) offer similar advantages through employer coverage.

Review your employer's full menu. Nearly a third of large employers will offer a non-traditional option in 2027, such as a high-performance network or variable copay plan, that can deliver quality care at lower cost. Ask HR what is changing before defaulting to last year's election. Many employers don't offer a choice in plans so make you review what will be changing for 2027 so you can prepare for those changes (e.g., check that your medications are still on formulary and that your physician(s) are still in network)

Time and price your care. If you anticipate a procedure, scheduling it within a single plan year means meeting one deductible instead of two. Ask about generic and biosimilar alternatives, and compare prices across pharmacies and facilities.

Speak up while rates are still proposals. State regulators review filings through late summer, and several states accept public comments. Maine expects final rates in August, with Connecticut and Washington following in September. Watch your state insurance department's announcements.

The bottom line

Annual increases are a given. Increases that consistently outpace inflation and wages are a warning. No family budget, employer benefits program, or public subsidy structure can absorb this trajectory indefinitely, and the people with the least room in their budgets are absorbing the most. Until the system changes, the strongest position available to any of us is to be a prepared patient: informed about how coverage works, deliberate at enrollment, and proactive about costs before they arrive.

Sources: U.S. Bureau of Labor Statistics Consumer Price Index (May 2026); KFF and the Peterson-KFF Health System Tracker preliminary 2027 rate filing analysis (July 2026); Georgetown University Center on Health Insurance Reforms; PwC Behind the Numbers 2027 medical cost trend report; Mercer Survey on Health and Benefit Strategies for 2027 and National Survey of Employer-Sponsored Health Plans; state insurance department filings.

The Prepared Patient: Your Guide to Surviving the Health Care System will be released on August 11. It is available for preorder at Amazon and Johns Hopkins University Press.