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The Most Expensive Open Enrollment in 20 Years Starts November 1

Employer health costs are set for their biggest jump since 2003, ACA insurers want a median 15% more, and the subsidies that cushioned the marketplace are gone. America's next inflation shock is in the benefits packet.

Alpha One

04 Oct 2026 • 6 min read

Open enrollment starts November 1. Before it ends, most of the roughly 185 million Americans with employer or ACA marketplace coverage will learn what their health insurance costs next year — and for many of them, the answer will be the worst number they've seen in two decades.

The headline figures, from the firms that actually price this market: employer health benefit costs are projected to rise 8.2% per worker in 2027, the largest increase since 2003, according to Mercer, the benefits arm of Marsh McLennan. WTW puts the figure at 11.1% — the biggest jump in more than 20 years by its count. Aon lands at 9.5%, which it calls the fourth consecutive year of elevated healthcare cost growth and "one of the most sustained periods of health care inflation employers have faced in decades."

On the individual market, it's worse. Insurers selling Affordable Care Act marketplace plans have proposed a median premium increase of 15% for 2027 across 276 insurers in all 50 states and the District of Columbia, per the Peterson-KFF Health System Tracker. That follows a year in which the median proposed increase was 18% and the median finalized increase was 20%. If the 2027 rates hold through state review, typical ACA premiums will have risen by more than a third in just two years.

Inflation headlines this year have been about tariffs, groceries, and rent. The next one is sitting in a benefits packet.

The employer market: the quiet majority gets the bill

About 166 million Americans under 65 get health insurance through work, per KFF — by far the largest block of coverage in the country, and the one that almost never makes headlines because the employer absorbs most of the sticker price. In 2025, the average worker paid $6,850 in annual premiums while the employer contributed more than $20,000 per worker.

That cushion is now compressing. In a Marsh survey of more than 1,800 employers conducted this summer, 59% said they plan cost-cutting changes to health benefits in 2027 — higher deductibles chief among them. The mechanics matter: a higher deductible keeps the visible premium increase smaller while shifting the real cost to whoever actually gets sick. As KFF's ACA policy analyst Matt McGough told CNBC: "There are other ways consumers get squeezed. It doesn't always just show up through the premiums."

Workers' total healthcare costs — premiums plus out-of-pocket spending — rose 7.9% in 2026, the fastest pace in a decade, according to Aon, which expects a similar rate in 2027. Zoom out and the trend is structural: over the past decade, employer-plan deductibles have grown 54% and family premiums 53%, against overall inflation of 36%, per KFF.

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The ACA market: the cushion is gone

Roughly 19.2 million Americans were enrolled in ACA marketplace plans as of the federal government's June count — the self-employed, gig workers, early retirees, small business owners. This is where the 2027 increase bites hardest, because the shock absorber that protected these enrollees for four years no longer exists.

The enhanced premium tax credits enacted in 2021 expired at the end of 2025, and Congress has not extended them. The consequences showed up immediately: average premium payments by ACA enrollees jumped 58% in 2026 — from $113 to $178 per month — while average marketplace deductibles rose $1,027 to a record $3,786, per KFF. Enrollment fell by about 3 million people, and insurers believe the people who left were disproportionately the young and healthy ones. That is the textbook setup for a deteriorating risk pool: the customers who remain are older and sicker, so insurers price the next year higher, which pushes out more healthy enrollees. The 2027 filings explicitly cite this dynamic.

The Peterson-KFF tracker offers a concrete case: a 40-year-old in Indianapolis earning $65,000 a year paid $316 per month for a silver plan in 2025 with the enhanced credits. In 2026, that payment climbed to $477. Under the proposed 2027 rates, it reaches $546 — roughly 73% more than two years earlier, for the same plan and the same income.

Most marketplace enrollees — 87% in 2026 — still receive some subsidy, and for them the premium caps blunt the headline increase. The exposed group is anyone earning above 400% of the federal poverty level, where subsidies now cut off entirely. For those households, the full 15% lands on top of last year's 20%.

Why this is happening

The rate filings themselves are unusually candid. The median medical cost trend insurers assume for 2027 is 10% — up from roughly 8% in recent years. Four drivers recur across hundreds of filings:

GLP-1 drugs. Weight-loss and diabetes medications are now a line item in nearly every actuarial memo. Rising GLP-1 utilization alone accounts for about one percentage point of 2027 employer cost growth, per the Marsh McLennan estimate cited by CNBC — and some employers are responding by dropping GLP-1 coverage outright.
Healthcare labor. Persistent workforce shortages keep pushing provider wages up, and those contracts flow straight into premiums.
General inflation. Insurers cite economy-wide cost pressure, supply chains, and in at least one filing, the indirect effect of tariffs on medical supplies.
Consolidation. Large hospital systems buying up physician practices gain negotiating leverage over insurers, and prices follow.

None of these forces are cyclical in any obvious way. Health policy researchers interviewed by CNBC raised the uncomfortable possibility that two decades of relative moderation in US health spending growth may simply be over. "They can expect to pay more," as UNC health policy professor Jonathan Oberlander put it — "not just in terms of premiums, but also in terms of deductibles and copayments."

Why it matters beyond your paycheck

Health insurance is the largest single employee benefit in the American economy, and its cost curve feeds through to everything: wage growth (every extra dollar of premium is a dollar not paid in salary), small-business hiring, early-retirement decisions, and household discretionary spending that is already visibly strained. A near-double-digit benefits cost increase, landing in the same economy where hiring has stalled, is a direct hit to the consumer that won't appear in a CPI print until it's already been absorbed.

And the timing is political. Open enrollment runs November 1 through January 15 on HealthCare.gov — meaning tens of millions of Americans will open their renewal letters in the weeks around the midterm elections, in a campaign season already dominated by affordability. The expired ACA subsidies are a live legislative question; whether Congress revisits them may depend on exactly how loud the next two months of sticker shock turns out to be.

The 2027 rates aren't final — state regulators can and do trim proposed increases, and last year's finalized ACA median came in above the proposed one. But the direction is not in dispute. The cheapest year of American health insurance for the next several years is, most likely, this one.

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