The specter of the 'death spiral' is back. Premiums for Obamacare health plans are projected to surge 14% in 2027, compounding a 20% increase from the previous year, according to a Forbes report by Joshua Cohen. The back-to-back double-digit hikes have reignited fears that the Affordable Care Act's marketplaces may become unaffordable for millions, potentially triggering a vicious cycle of healthier enrollees dropping coverage and further premium spikes.
These projections come as the Biden administration's enhanced premium subsidies, enacted under the Inflation Reduction Act, are set to expire after 2025. If Congress does not extend them, the full weight of the increases could fall on consumers. The 2027 increase, while lower than the prior year's 20%, marks a continuing trend that threatens to reverse the coverage gains made since the ACA's rollout.
Obamacare premium increases have historically been volatile. Early years saw single-digit rises, but the market stabilized after 2018. The pandemic-era subsidies boosted enrollment to a record 21.3 million in 2024, but sustainability remains a question. The projected 14% hike for 2027 follows a pattern of higher costs for insurers, driven by medical inflation, rising drug prices, and a sicker-than-expected enrollee pool.
The 'death spiral' concept describes a scenario where rising premiums drive healthy individuals away, leaving a smaller, sicker, and more expensive pool, which pushes premiums higher still. Experts at the Kaiser Family Foundation note that the ACA marketplaces have avoided this so far due to risk adjustment programs and subsidies, but the consecutive large increases test these safeguards. Insurers like Blue Cross Blue Shield and Cigna have already signaled intentions to raise rates in several states.
The broader implications are significant. The ACA currently covers over 20 million Americans. If premiums continue rising and subsidies lapse, the uninsured rate could climb above its current 8% low. Political observers say the issue will be a flashpoint in the 2026 midterm elections, with Democrats pushing for permanent subsidy extensions and Republicans arguing for market-based reforms to lower costs.
What happens next depends on congressional action. The enhanced subsidies are the most immediate lever; without them, average premiums could jump 25–30% for some consumers. Additionally, state regulators will weigh insurer rate filings in the coming months. A key milestone is the fall 2026 open enrollment period, where actual 2027 rates will be released. The 'death spiral' label may be premature, but these Obamacare premium increases are a clear warning sign that affordability is fraying.
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Obamacare Premium Increases Raise Questions About Affordability And ‘Death Spiral’
Obamacare faces renewed "death spiral" concerns as premiums are projected to jump 14% in 2027, following last year's 20% increase.
Joshua P. Cohen, Senior Contributor
Forbes
2 min read
8/10
Key Takeaways
- Premium increases for Obamacare plans are projected at 14% for 2027, following a 20% jump in the prior year—the steepest consecutive hikes since the ACA's inception.
- The enhanced premium subsidies from the Inflation Reduction Act, which boosted enrollment to a record 21.3 million, are set to expire after 2025, potentially exposing consumers to full costs.
- Medical inflation, rising prescription drug prices, and a sicker-than-expected risk pool are the primary drivers cited by insurers for the rate hikes.
- Over 20 million Americans currently receive coverage through ACA marketplaces, making the sustainability of these premium levels a major political and economic issue.
- The 'death spiral' scenario—where healthier enrollees drop out due to higher costs, worsening the risk pool—has not yet materialized but remains a growing concern among health policy analysts.
Frequently Asked Questions
The projected increase is 14%, following a 20% rise the previous year, according to a Forbes report. This marks the second consecutive double-digit hike.
Premiums increased by 20% in the year prior to the 2027 projection. These back-to-back increases are among the largest since the ACA's launch.
A death spiral is a scenario where increasing premiums drive healthier enrollees to drop coverage, leaving a smaller, sicker pool. This forces insurers to raise rates further, accelerating the cycle.
Yes, currently enhanced subsidies under the Inflation Reduction Act help lower costs. However, they are set to expire after 2025, which could leave consumers facing the full rate increases.
Over 20 million Americans are covered through ACA marketplaces as of 2025, including 21.3 million during the record enrollment period in 2024.
If subsidies expire, average premiums could rise 25–30% for many consumers, potentially increasing the uninsured rate and straining the marketplace's stability.
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www.forbes.com
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