2027 health insurance costs: 14% premium hikes and a $12,000 out-of-pocket ceiling

How much is health insurance going up in 2027?

Most people will pay more on two lines at once in 2027: the premium, and what they owe when they actually use care. Insurers in the ACA marketplace proposed a median premium increase of 14 percent for 2027, on top of a 20 percent median increase for 2026, according to KFF’s review of early rate filings. Small-group insurers asked for the same 14 percent median, per the Peterson-KFF Health System Tracker.

The cost of using a plan is rising too. The federal ceiling on in-network out-of-pocket costs climbs to $12,000 for one person and $24,000 for a family in 2027, a 13.2 percent jump that CMS published in January 2026. Plans can set a lower limit, and the number printed on your plan’s Summary of Benefits and Coverage is the one that applies to you.

Job-based coverage is not immune. The average employer family premium reached $28,303 in 2026, up 5 percent, and workers’ share rose 9 percent to $7,471, according to KFF’s 2026 Employer Health Benefits Survey. Workers at small firms paid more, $9,687 on average for family coverage. Medicare has its own disruption: KFF counts 4.3 million beneficiaries whose Medicare Advantage or stand-alone drug plan ends on December 31, 2026.

How do deductibles and out-of-pocket limits add up on top of the premium?

The premium is what you pay to keep the plan. The deductible, coinsurance and copays are what you pay when you use it, and only those count toward your out-of-pocket maximum. Premiums never do, so your true worst-case year is the premium plus the out-of-pocket limit.

• Premium: the monthly bill for having coverage, owed whether or not you see a doctor.
• Deductible: what you pay for covered care before the plan starts sharing the cost. Preventive care is usually covered before the deductible.
• Coinsurance: your percentage of each bill after the deductible, such as 20 or 30 percent.
• Copay: a flat fee for a visit or a prescription.
• Out-of-pocket maximum: the most you pay in a year for covered in-network care. After you reach it, the plan pays 100 percent until the year resets.

Here is how one surgery plays out on an unsubsidized individual plan. The plan numbers are an illustration, not a quote.

Two things stand out. The premium alone was $10,200, and the out-of-pocket limit added another $10,000, so a year with one large claim cost $20,200. In a quiet year with $3,000 of care, the same person still pays $13,200, because all $3,000 falls under the deductible. People who earn too much for marketplace subsidies, about $63,000 for one person or $129,000 for a family of four, pay these numbers in full.

Why does an employer plan usually cost workers less?

Because the employer pays most of the premium, and group plans tend to carry lower deductibles and wider networks. In 2026, workers paid on average 18 percent of the premium for single coverage and 27 percent for family coverage, and the employer paid the rest. For single coverage, that was $1,672 from the worker and $8,132 from the employer, according to KFF.

Deductibles are usually lower as well. The average single deductible in an employer plan was $1,955 in 2026, though it averaged $2,624 at firms with fewer than 200 workers. Run the same $40,000 surgery through an employer plan with a $1,955 deductible, 20 percent coinsurance and a $5,000 out-of-pocket limit: the deductible plus 20 percent of the remaining $38,045 comes to $9,564, so the $5,000 limit applies. Add the $1,672 premium share, and the worker’s year costs $6,672.

The network matters as much as the price. A group plan can be built on a national PPO network, so employees in other states and specialists outside the network stay covered at some level. Many individual-market plans are HMOs or EPOs that pay nothing outside their network except in emergencies. If you are unsure which kind you have, our guide to the difference between HMO and PPO plans walks through how each one pays.

How does a business benefit from the premiums it pays?

The company’s share of employee premiums is generally deductible as a business expense, and it is not taxable income to the employee. Employee contributions paid through a Section 125 cafeteria plan come out of pay before federal income tax and FICA, which lowers payroll taxes on both sides, as the IRS explains in Revenue Ruling 2002-3. Here is a simplified illustration for a 10-person team.

The treatment depends on how the business is organized. Sole proprietors, partners and S corporation owners with more than 2 percent of the shares follow different rules for their own coverage, so confirm the details with your CPA before you build a budget around them.

Can a level-funded plan lower a 2027 renewal?

Often, if your team is healthy enough to pass basic underwriting. A level-funded plan charges a fixed monthly payment like regular insurance, but part of each payment is held for your group’s own claims, and unused money can come back after the plan year closes. KFF’s 2026 survey found 38 percent of covered workers at small firms are already in one.

The tradeoff is underwriting. Each employee answers a short health questionnaire, the carrier prices the group on its expected claims, and it can decline a group. ACA small-group plans cannot decline you or price on health; they are community-rated, which is why a healthy group often ends up paying for the whole pool’s claims.

In our case study of a five-person Illinois firm, a healthy group facing a 28 percent renewal moved to a level-funded PPO at about half the cost. Our guide to how level-funded health plans work in 2027 covers stop-loss, refunds and renewal risk. If your team is spread across states or has significant health conditions, an allowance can fit better; see ICHRA vs QSEHRA.

Timing matters. Underwriting takes several weeks, so request quotes 60 to 90 days before your renewal date. If underwriting does not work out, ACA small-group carriers must still accept your group, and from November 15 to December 15 they waive participation and contribution minimums for a January 1 start. You can send your renewal through our small business health plans page and we will price both routes side by side.

What can people on Medicare do about higher 2027 costs?

Compare before December 7. The Annual Enrollment Period runs October 15 to December 7, and two changes can lower your total yearly cost if they fit your doctors and your health. Neither is right for everyone, so look at the out-of-pocket limit and the network, not just the premium.

Switch Medicare Advantage plans, including to an HMO

HMOs usually carry lower out-of-pocket limits than PPOs. In 2026 the average in-network limit was $4,636 in Medicare Advantage HMOs and $6,592 in PPOs, according to KFF. The tradeoff is the network: an HMO generally covers only in-network care, except emergencies and urgent care, and may require referrals. If your doctors and hospital are in the HMO’s network, a lower cap can matter more than the premium. Check each doctor in the Medicare Plan Finder or with the plan before you enroll. If you miss December 7, the Medicare Advantage Open Enrollment Period from January 1 to March 31 allows one switch.

Use the birthday rule to change your Medigap plan

If you already have a Medicare Supplement, 15 states now give you a yearly window around your birthday to switch policies without health questions. The details differ by state: the length of the window, whether you can change insurers, and which plan letters you can move to. Our Medigap birthday rule guide explains how it works, and the Medigap switch checker shows your own window and dates.

What if your Medicare Advantage plan is ending in 2027?

You have two paths, and one of them comes with a protection most people never get. KFF counts 3.1 million Medicare Advantage drug plan enrollees whose plans end on December 31, 2026. If you do nothing, you are moved to Original Medicare, with no Part D drug plan unless you choose one.

Pick another Medicare Advantage plan. Enroll by December 31 for coverage starting January 1. People whose plan was not renewed also have a special enrollment period that runs through February 28, 2027.

Move to Original Medicare with a Medigap plan. Because your plan is ending, federal law gives you a guaranteed-issue right. Insurers must sell you Medigap Plan A, B, D, G, K or L (Plan C or F if you were eligible for Medicare before 2020) without health questions and without a pre-existing condition waiting period. You can apply as early as 60 days before your plan ends and no later than 63 days after, and many states add more rights.

Pair a Medigap plan with a stand-alone Part D plan, since Medigap does not cover prescriptions. For 2027, the Part D deductible can be as high as $700 and drug costs are capped at $2,400. Our guides to what to do when your Medicare Advantage plan leaves your area and to the Humana and UnitedHealthcare 2027 plan exits walk through each step, and our Medicare plan reviews compare both paths for your ZIP code.