Obamacare Premiums Are Jumping Again in 2027 — and the Subsidy Cliff Is Back
ACA insurers are proposing a median 14% premium increase for 2027, and the enhanced subsidies are gone. Here's who gets hit, the 400% cliff, and what to do before open enrollment.
Insurers are proposing a median increase of about 14% for 2027, per KFF's analysis of preliminary rate filings across 16 states and DC — a likely second straight year of double-digit hikes. Most of the 77 insurers that have filed so far are requesting 10%–20%, with 20 insurers requesting more than 20%.
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About the Author
Sujit KarkiFinance Researcher & Market Analyst
Independent finance researcher and market analyst with expertise in macroeconomics, equity markets, and personal finance. I help regular investors make better-informed decisions through rigorous, data-driven analysis.
If you buy your own health insurance through the ACA marketplace, 2027 is going to sting — and the reason is two separate things stacking on top of each other. Let me separate them, because they get blurred constantly.
Key Takeaways
Insurers are proposing a median 14% premium increase for 2027 (KFF, July 2026), with most filings between 10% and 20%.
The enhanced premium tax credits expired end-2025 and were NOT renewed in the One Big Beautiful Bill Act.
That already pushed after-subsidy premiums up sharply for 2026 as healthier enrollees left the pool.
The 400%-of-poverty subsidy cliff is back: cross it and you can lose all premium help at once.
Open enrollment runs November 1, 2026 – January 15, 2027 — plan before then.
What's happening for 2027
Per KFF's July 2026 analysis of preliminary rate filings across 16 states and DC, ACA Marketplace insurers are proposing a median premium increase of 14% for 2027 — a likely second consecutive year of double-digit increases. Of the 77 insurers that had filed by mid-July, most are requesting increases between 10% and 20%, and 20 insurers are requesting more than 20%. If these hold through the rate-review process (rates are finalized in late summer), typical premiums for participating insurers would climb by more than a third between 2025 and 2027.
Median proposed 2027 premium increase0%KFF analysis of preliminary rate filings, 16 states + DC, July 2026
Why premiums are climbing
Two forces, and it's worth keeping them distinct:
Ordinary cost growth
Most of the increase reflects normal medical cost growth — hospitalization, physician visits, and prescription drug costs, including rising GLP-1 weight-loss drug demand.
Labor shortages and general inflation have pushed up provider wages and costs across the system.
Subsidy-driven
The enhanced premium tax credits from the 2021 American Rescue Plan expired at the end of 2025, and Congress did not renew them in the One Big Beautiful Bill Act.
That pushed healthier, price-sensitive enrollees out of the risk pool, leaving a sicker and more expensive group of remaining enrollees behind.
Breaking the median 14-point increase down into its two drivers makes the split explicit — most of it is the ordinary cost of medicine, not politics:
The subsidy cliff, explained
Here's the mechanic that traps people. With the enhanced credits gone, the old
400%-of-federal-poverty-level cliff is back. Below 400% FPL you get a tax
credit on a sliding scale. At 400% or above you can lose all premium
assistance and pay the full, unsubsidised rate.
So the number that actually matters is the dollar income where that happens —
and it depends entirely on how many people are in your household. Marketplace
eligibility for a coverage year uses the poverty guidelines published the
previous calendar year, so 2027 coverage is governed by the 2026 guidelines
the Department of Health and Human Services published in January.
Here is that threshold, worked out for each household size:
400% of FPL — the 2027 subsidy cliff, 48 contiguous states and DC
People in household
2026 poverty guideline
400% — the cliff
1
$15,960
$63,840
2
$21,640
$86,560
3
$27,320
$109,280
4
$33,000
$132,000
5
$38,680
$154,720
6
$44,360
$177,440
Each additional person adds $5,680 to the guideline, so $22,720 to the
cliff. Alaska and Hawaii have their own, higher guidelines — for a single person
those run $19,950 and $18,360 respectively, pushing the cliff to $79,800 and
$73,440.
Warning
This is a true cliff, not a ramp. A single dollar of extra income across that
line can cost thousands in lost subsidy — the classic case is a household of one
at $63,839 versus $63,841. If you are anywhere near the threshold, reducing MAGI
through HSA or pre-tax retirement contributions can be worth considerably more
than the raise that pushed you over it.
Pro Tip
Correction, 7 September 2026. This post originally gave the single-person
cliff as "roughly $62,600". The correct figure from the 2026 HHS guidelines is
$63,840. The error mattered in the wrong direction — it would have told
someone earning $63,000 that they had lost all subsidy when they had not.
There is a second trap underneath the first one, and it catches people who never
thought the cliff applied to them. The premium tax credit is paid in advance,
month by month, based on the income you estimate when you enrol. It is then
reconciled against your actual income when you file. If you estimated below 400%
and finished the year above it, you do not simply lose next year's help — you
repay the whole advance credit you already received, as a lump sum, at tax time.
That is why this matters to anyone with variable income: freelancers, people on
commission, anyone who might take on a late-year contract or realise a capital
gain. A profitable December can retroactively convert a year of subsidised
premiums into a bill. The people most exposed are precisely those who cannot
predict their income in November, when they have to state it.
The practical consequence is that if your income is uncertain and might land near
the threshold, estimating it high is often the safer error. Under-claiming
means a refund when you reconcile. Over-claiming means writing a cheque.
The cliff mechanic
One income line decides everything
Your household MAGI
↓ compared against 400% of the federal poverty level ↓
Under 400% FPL
Sliding-scale premium tax credit — the closer to the line, the smaller the credit.
At or over 400% FPL
Zero premium tax credit — you pay the full, unsubsidized sticker price.
There's no phase-out ramp at the top like there is with many tax credits — one dollar over the line and the entire subsidy disappears at once.
Interactive · are you near the subsidy cliff?
The 400% FPL cliff, for your household
Household income (MAGI)$60,000
Household size
You're at about 0% of the poverty line for a household of 1. The 400% cliff sits at $62,600 — you have about $0 of headroom before losing subsidy eligibility entirely.
Your income$60,000
$0400% FPL: $62,600
Uses the widely-cited 2026 figure of $62,600 as 400% FPL for a household of one, scaled by the standard per-person HHS increment. Poverty guidelines update every January — verify against the current healthcare.gov figures before making coverage decisions. Not tax or insurance advice.
Who gets hit hardest
The 2027 increases primarily hit enrollees just above 400% FPL who no longer qualify for any subsidy at all. People below that level still get some tax credit, but with benchmark premiums themselves rising, the dollar amount they owe out of pocket climbs too — and the subsidy cliff's return is expected to push more people out of the marketplace entirely.
Here's What I'd Actually Do
Map your MAGI against 400% FPL before December. If you're close, model whether an HSA or pre-tax retirement contribution keeps you under the cliff.
Shop, don't auto-renew. With this much repricing, last year's best plan may be badly overpriced now. Compare at healthcare.gov during open enrollment.
Weigh premium vs. deductible. Many insurers are pricing plans with higher deductibles for lower premiums — run your expected usage before picking a plan on premium alone.
Mark the calendar: Nov 1, 2026 – Jan 15, 2027. Miss it and you're locked out absent a qualifying life event.
Sujit Karki|||5 min read