Gross premiums for the marketplace “benchmark” health plan are projected to rise by about 7.7% in 2027, an estimate tied specifically to Congress’s decision to let enhanced premium tax credits expire at the end of 2025. The figure applies to people who buy individual coverage through the Affordable Care Act marketplaces rather than through an employer, and it follows a smaller, already-realized increase attributed to the same policy shift in 2026. The number comes from Congressional Budget Office analysis that insurers cited directly in their own 2027 rate filings. What the figure actually measures, and why it compounds year over year, matters as much as the percentage itself.
What CBO’s “Benchmark Premium” Actually Measures
The benchmark used in this estimate is not an average across every marketplace plan sold. It is the price of the second-lowest-cost silver plan available in a given region, the specific plan federal law uses to calculate how large a premium tax credit an enrollee can claim. When that number rises, it raises both the subsidy math used for assisted enrollees and the sticker price quoted to shoppers who receive no assistance at all.
The Congressional Budget Office uses that same definition in its own analysis of what happens when the enhanced premium tax credit lapses. In a formal estimate sent to Senate leadership, the agency explains that gross benchmark premiums move because of who stays enrolled, not because insurers arbitrarily raise prices: fewer subsidized, healthier enrollees in the risk pool leaves a costlier pool of enrollees behind.
Insurer rate filings compiled by KFF’s Health System Tracker show that mechanism compounding year to year: a smaller adjustment tied to 2026, and a 7.7% adjustment specifically tied to 2027, as more of the healthier population that would have stayed enrolled under the enhanced credit has time to leave the individual market entirely. The two-year pattern is why insurers describe 2027 as building on an already-adjusted, less healthy base rather than starting fresh.
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The Healthier-Enrollee Math Behind the Estimate
Insurers do not file rate requests based on abstract policy debates; they file based on who they expect to cover next year. Multiple insurers’ 2027 rate filings cite the same CBO framework directly, building an assumption of a sicker remaining risk pool into their premium math for next year, layered on top of the adjustment they already made for 2026 enrollment.
The premium tax credit itself is what determines whether a given household notices the shift at all. The IRS describes the credit as advanceable and reconciled annually: an enrollee can apply an estimated credit against each month’s bill, then true up the amount against actual household income when filing taxes the following spring. Enrollees whose income and application still qualify them for assistance see a subsidy absorb part of any rate increase, while enrollees who buy coverage without a credit, whether by income or by choice, pay the full benchmark increase directly out of pocket.
That split explains why the same 7.7% figure lands very differently across two households holding an identical plan. One offsets most of the increase through a larger tax credit calculated against the new, higher benchmark. The other, receiving no credit at all, absorbs the increase as a straight addition to next year’s monthly bill.
Rate filings reviewed by KFF rarely cite the lapsed credit alone. Several insurers also point to a separate federal rule tightening marketplace eligibility verification and to new restrictions on enrolling outside the standard sign-up window as smaller contributors layered on top of the credit-driven increase, though insurers describe the credit’s expiration as the dominant factor behind the 2027 filings.
Why the Number Is a Projection, Not a Final Rate
The 7.7% figure is a projection built before final 2027 rates are set. State insurance regulators still review and can adjust the preliminary numbers insurers file, a process that plays out over the summer before a state approves a final rate for the coming plan year.
CBO’s estimate also assumes no further change in federal policy toward the enhanced credit between now and the 2027 plan year. A future extension, restoration, or replacement of the credit structure would change the baseline the projection is built on, since the entire estimate exists specifically to describe what happens without one.
The projection also does not apply to everyone with health coverage. People covered through an employer, Medicare, or Medicaid are not priced against the ACA marketplace benchmark at all, so the 7.7% figure speaks only to the smaller slice of the population that buys coverage individually rather than through a workplace or a public program built for a different age or income group.
For now, insurers, state regulators, and the Congressional Budget Office are working from the same assumption: the enhanced credit is gone, and the 2027 benchmark premium is being built to reflect a market without it. That shared assumption is also why the estimate reads as a floor rather than a ceiling. If fewer healthy enrollees stay in the market than CBO projected, the final 2027 rate increases insurers request could land above 7.7% rather than below it.
The Medicare Math Running Alongside This One
The same benchmark-premium math that is pushing marketplace costs higher in 2027 has a parallel on the Medicare side, where Part D out-of-pocket costs and Medicare Savings Program income limits shift on their own separate schedule. A household with one spouse still buying ACA coverage and another approaching Medicare is tracking two federal premium calculations at once.
The Medicare Cost & Coverage Protection Kit is a 10-page kit covering 51 state Medicare cost-help packs and the new Part D out-of-pocket cap, along with a medication and cost tracker.
Compare the Medicare-side numbers in The Medicare Cost & Coverage Protection Kit.
This article was researched and drafted with the assistance of AI and reviewed by The Money Overview editorial team.
