ACA 2027 Rate Filings Land With 22% to 30% Premium Hikes Across Eight States

From analyzing ACA rate filings across 15 states over the past three filing cycles, a consistent pattern emerges: the morbidity adjustment factor, not medical trend, is what separates a 10% rate increase from a 28% one. Medical trend assumptions cluster within a 2-to-3-point band across carriers in any given state. Pharmacy trend, even with GLP-1 volatility, produces divergence of perhaps 4 to 5 points. But the morbidity adjustment, the factor that captures how the enrolled population's average sickness level changes when enrollment contracts, swings by a factor of six across carriers filing in the same state for the same year. That is exactly what the first wave of 2027 ACA filings shows.

Eight states and the District of Columbia have published preliminary 2027 rate requests as of early June 2026. The headline numbers grab attention: Washington at +22.4% average, Oregon at +17.2%, Connecticut at +15.7%, Maine at +16.8%. But the actuarial story sits in the carrier-level filings, where individual morbidity adjustments range from a negligible 1.031 factor (WellPoint Washington) to a 1.195 factor (UnitedHealthcare of Oregon serving Washington). That 16-point spread in morbidity loading alone explains most of the carrier-level variance. These are not disagreements about how fast hospital costs are rising. They are fundamentally different assumptions about who remains in the risk pool after the enhanced premium tax credits expired.

State-by-State Filing Data: The First Wave of 2027 Requests

The eight jurisdictions that have published 2027 rate requests represent a cross-section of regulatory approaches, market structures, and carrier competition levels. The variance across states is substantial, and it correlates with two structural factors: the share of enrollees who were subsidy-dependent, and the rigor of the state's rate review process.

State	Individual Market Avg.	Small Group Avg.	Carrier Range	Key Factor
Washington	+22.4%	N/A	+8.6% to +27.8%	13 carriers; 1 exit (Providence)
Oregon	+17.2%	+16.0%	+11.7% to +25.0%	Providence + PacificSource exit; 4 carriers remain
Maine	+16.8%	+15.7%	+9.0% to +34.8%	Mending Health exit; 4 carriers remain
Connecticut	+15.7%	+17.8%	Varies by carrier	Small group market down to 2 carriers
Illinois	+14.0%	+15.4%	Varies; Cigna exiting	Cigna exits individual coverage (2,885 members)
Massachusetts	+13.1%	+12.7%	+11.9% to +25.7%	Self-insured level-funded share grew to 11%
DC	+9.5%	+10.4%	+8.6% to +25.0%	181 plans filed (down from 194)
Vermont	+6.5%	+3.1%	+1.6% to +7.8%	Active rate review; 2 carriers

States with active rate review processes, where regulators evaluate actuarial assumptions, negotiate with carriers, and can reject or modify filing requests, produce approved rates that run 8 to 12 points lower than states using file-and-use systems. Vermont's Green Mountain Care Board scrutinizes every assumption in the actuarial memorandum. Washington's OIC conducts a public rate review process with comment periods and actuarial challenge rounds. The difference between Vermont's 6.5% weighted average and Maine's 16.8% is not entirely attributable to market structure; it reflects the regulatory filter applied to carrier assumptions about morbidity deterioration and trend.

The Subsidy Expiration: Enrollment Decline and Premium Shock

The IRA-enhanced premium tax credits expired at the end of 2025, returning ACA marketplace subsidies to their pre-American Rescue Plan structure. The effects landed immediately. National marketplace enrollment dropped from 24.3 million in 2025 to 23.1 million in 2026, a 4.9% decline representing 1.19 million fewer enrollees (KFF enrollment data). Out-of-pocket premiums rose 114% on average for the 2026 plan year (Georgetown CHIR analysis). The national benchmark premium, the second-lowest-cost silver plan for a 40-year-old, jumped 25.8% from $497 to $625 per month.

The enrollment decline was not uniform. North Carolina lost 213,653 enrollees. Florida shed 196,643. Georgia dropped 186,557. Meanwhile, Texas gained 206,007 enrollees and Connecticut added 5,594, demonstrating that state-level factors including Medicaid expansion status, broker marketing, and state-funded subsidy replacements produce divergent outcomes even under the same federal subsidy structure.

The most telling metric is the income-band distribution of disenrollment. In California, middle-income enrollees at 400% to 600% of the federal poverty level experienced a 63% enrollment drop. These are the enrollees who lost all subsidy eligibility when enhanced PTCs expired, because the pre-ARP structure caps subsidies at 400% FPL. Bronze plan share among new California consumers jumped from 23% to 37%, a clear adverse selection signal within metal tiers: the remaining middle-income enrollees are choosing the lowest-premium option to minimize cost, shifting actuarial risk toward the catastrophic tail of the claims distribution.

In Massachusetts, middle-income net premiums increased from $319 per month to $580 per month for enrollees at 400% to 500% FPL. Pennsylvania saw cancellations increase fourfold, with premium payment completion falling to 77% from 88%. Idaho's disenrollments quadrupled. Only New Mexico, which fully backfilled lost federal credits with state funding, saw enrollment increase (+17%).

Carrier-Level Morbidity Adjustments: What the Filing Memoranda Reveal

The 2027 actuarial memoranda filed with state regulators through SERFF contain the most granular window into how pricing actuaries are quantifying the post-subsidy morbidity shift. The adjustments range from negligible to transformative, and the language in the filings makes clear that carriers view the EPTC expiration as the primary driver of rate increases beyond standard medical trend.

In Washington, UnitedHealthcare of Oregon (serving Washington enrollees) applied the steepest morbidity adjustment at 1.195, meaning the carrier expects average allowed PMPM to increase 19.5% solely from the compositional shift in its risk pool, before any medical trend is applied. With 6,759 enrollees, UHC's Washington book is small and heavily subsidy-dependent, making it acutely sensitive to enrollment composition changes.

Coordinated Care Corporation, the largest individual market carrier in Washington with 97,979 enrollees, filed at +27.8% and explicitly stated it "expects healthier individuals to exit market." Its filing documents that the EPTC expiration will cause younger, healthier, price-sensitive members who were paying $0 to $50 per month after subsidies, and now face $200 to $400, to drop coverage entirely.

Community Health Plan of Washington (CHPW) applied a 9.7% explicit morbidity adjustment for premium tax credit effects on its 36,854-member book. Moda Health in Oregon applied a 1.040 morbidity adjustment, stating that "the change in population and enrollment driven by the expiration of the enhanced premium tax credits is the main driver of the morbidity adjustment." WellPoint Washington applied a more conservative 1.031 factor.

At the other end, Kaiser Foundation Northwest filed at just 9.5% with no material morbidity change expected. Kaiser's integrated delivery model anchors a membership base that selects the plan for the care delivery system, not the premium price alone. Its enrollees are less subsidy-sensitive, producing lower lapse rates and more stable risk pool composition through subsidy changes.

The pattern from these filings is clear and consistent with what we documented in the Washington-specific filing analysis: carriers whose enrollment is most concentrated among on-exchange, subsidy-dependent members project the steepest adverse selection loads. Carriers with commercially anchored or integrated-delivery enrollment project modest adjustments.

The Actuarial Mechanics of the Morbidity Shift

The morbidity adjustment factor is not speculative. Pricing actuaries construct it from demographic morbidity relativities using a three-step framework documented in the SERFF actuarial memoranda.

Step 1: Base period enrollment distribution. The actuary establishes the age-sex composition of the 2025 or early 2026 enrolled population, weighted by member-months. Each age-sex cell receives a morbidity relativity factor, typically derived from the ACA's 3:1 age band with granular age-sex factors published by CMS, or from carrier-specific experience-rated relativities. The weighted average across all cells produces the base period morbidity index.

Step 2: Project the 2027 enrollment distribution. This is where carrier-specific assumptions diverge most sharply. A carrier expecting 20% lapse concentrated in the 18-to-34 age band will project a 2027 distribution that is older and more heavily weighted toward the 45-to-64 age cells, which carry morbidity relativities 2x to 3x higher than the youngest cells under the ACA age curve. A carrier expecting uniform lapse across age bands projects a smaller compositional shift.

Step 3: Compute the adjustment factor. The ratio of the projected 2027 weighted average morbidity relativity to the base period average yields the factor. If the base is 1.00 and the projected 2027 average is 1.06, the morbidity adjustment is 1.06, adding 6 percentage points to the rate increase independent of medical trend.

For Coordinated Care, with nearly 98,000 members skewing toward the subsidy-eligible population, even a modest shift in the age distribution (the 18-to-34 share dropping from 28% to 22%) can produce a factor of 1.05 to 1.08. For Kaiser Northwest, where the age distribution is already older and more stable, the same subsidy shock might shift the 18-to-34 share from 20% to 18%, yielding a factor of 1.01 to 1.02.

Layered on top of this demographic morbidity adjustment, some carriers apply an explicit adverse selection loading that accounts for the feedback loop between premium increases and further enrollment attrition. Higher rates cause additional healthy members to leave, further worsening the pool's average morbidity, requiring still-higher rates. This spiral effect is most pronounced for carriers with large on-exchange, subsidy-dependent populations.

Pharmacy Trend Compounds the Morbidity Problem

Medical trend alone does not explain the 2027 rate requests. Pharmacy cost trends are running at historically elevated levels, compounding the morbidity-driven premium pressure. Molina Healthcare in Washington cited 19.8% pharmacy trend in its filing. WellSense in Massachusetts reported behavioral health spending growing at over 20% annually with pharmacy at double-digit rates. Health New England documented 8.2% pharmacy trend with an additional 3.4% drug utilization increase.

The GLP-1 drug class, including semaglutide (Ozempic, Wegovy) and tirzepatide (Mounjaro, Zepbound), is the primary driver of pharmacy trend acceleration. As we analyzed in the GLP-1 pipeline and pricing cliff analysis, nine obesity drugs are targeting FDA approval by 2027 and could disrupt the Novo Nordisk/Eli Lilly duopoly. But for 2027 rate filings, carriers must price against current GLP-1 costs and utilization trajectories while attempting to quantify the credibility gap between limited ACA-population GLP-1 data and the broader commercial trend.

Blended medical trend across Washington carriers ranges from 6.3% to 13.8%, with the pharmacy component increasingly responsible for the upper end of that band. When 8% to 14% medical-pharmacy trend layers onto a 3% to 19.5% morbidity adjustment, the compounding produces the headline-level increases that appear in the filings.

Five Carrier Exits Reduce Competition and Concentrate Risk

Carrier exits from the individual market are compounding the adverse selection pressure by reducing competitive alternatives for consumers and concentrating risk among fewer insurers. Five carriers have announced market exits or withdrawals affecting 2027 coverage across three states.

Carrier	State	Enrollees Affected	Reason
Providence Health Plan	Oregon, Washington	~34,000-40,000 (421,000+ total across all lines)	Shutting down health insurance division
PacificSource	Oregon	~18,000	Withdrawing from individual market
Cigna Healthcare	Illinois	2,885	"Scale limitations"
Mending Health (formerly Taro)	Maine	~1,100	Ceasing operations

Oregon's situation is the most acute. Providence Health Plan, which covered 421,000+ Oregonians across all lines, exited on May 21, 2026, displacing approximately 34,000 to 40,000 individual market enrollees. PacificSource is simultaneously withdrawing from the individual market, affecting another 18,000 members. Oregon drops to just four individual market carriers for 2027. The remaining carriers must absorb displaced enrollees whose risk profile may differ from their existing books, and the reduced competition eliminates the market discipline that kept carrier-level requests within a narrower band.

This dynamic mirrors the pattern documented in our carrier exits and risk pool repricing analysis: when carriers exit, the residual carriers face adverse selection from members who are more likely to be high-utilizers (healthy members may use the disruption as a reason to drop coverage entirely), while simultaneously gaining pricing power in markets with fewer competitive alternatives.

Risk Adjustment Transfers: Why 45 CFR §153 Cannot Offset the Spiral

The ACA's risk adjustment program transfers funds from carriers with lower-than-average risk scores to carriers with higher-than-average risk scores within each state market. In a stable market with growing enrollment, the mechanism functions as designed: carriers enrolling sicker populations receive compensating payments that reduce the incentive to cherry-pick healthier risks.

In a contracting market, the mechanism degrades. When total enrollment drops, the aggregate risk adjustment transfer pool shrinks proportionally. Carriers that were net receivers still see their absolute transfer payments decline even if their relative risk position is unchanged. More critically, when healthier enrollees leave the market entirely (rather than switching carriers), the market-average risk score rises. This compresses the spread between high-risk and average-risk carriers, reducing per-member transfer amounts precisely when the carriers with the sickest populations need the transfers most.

The 2027 CMS Notice of Benefit and Payment Parameters compounds this concern. CMS projects 1.2 to 2 million additional enrollment reductions from regulatory changes implemented through H.R.1, generating an estimated $10.15 billion in federal premium tax credit savings. The NBPP's risk adjustment recalibration introduces additional uncertainty into transfer payment projections, forcing pricing actuaries to widen their assumption bands for net transfer receivables in the 2027 rate build.

Massachusetts: The Self-Insured Erosion Signal

Massachusetts illustrates a secondary threat to ACA risk pool stability that extends beyond the subsidy expiration. The state's self-insured level-funded market share grew from 2% in 2021 to 11% in 2025. Level-funded arrangements, where small employers technically self-insure with stop-loss protection, allow groups with favorable demographics to exit the ACA-regulated small group market while retaining insurance-like risk transfer through stop-loss carriers.

This migration pattern functions as adverse selection by regulatory arbitrage. Healthier employer groups exit the ACA small group pool for level-funded arrangements where their premiums reflect their own claims experience rather than the community-rated pool average. The remaining ACA small group pool skews sicker, driving higher community-rated premiums, which pushes more healthy groups toward level-funding, accelerating the cycle.

Fallon Community Health Plan filed at +25.7% in Massachusetts, with the filing decomposition showing 5.1% from risk adjustment changes, 8.5% from claims trend, 3.3% from policy and benefit changes, 2.4% from utilization increases, and 3.7% from unit cost inflation. The compounding of these components, layered onto a pool already eroded by level-funded migration, produces the steepest individual filing in the state. This convergence of stop-loss market dynamics with ACA market contraction creates a dual-channel risk pool deterioration that pricing actuaries in merged-market states like Massachusetts must model simultaneously.

CBO Projections and the Structural Outlook

The Congressional Budget Office projects over 14 million more people will be uninsured by 2034 due to a combination of Medicaid eligibility changes and the PTC expiration. The current uninsured population (ages 0-64) stands at 26.7 million, representing a 9.8% uninsured rate, up from 9.5% in 2023. This is the first increase in the uninsured rate since 2019.

KFF's subsidy calculator data for 2026 shows that the pre-ARP contribution structure has been restored, with premium contributions ranging from 2.1% to 9.96% of household income. Subsidy eligibility is now capped at 400% FPL ($15,650 for a single individual, $32,650 for a family of four), eliminating the enhanced credits that previously extended to higher income levels with no contribution cap.

The highest state-level benchmark premiums for 2026 illustrate the affordability challenge: Vermont at $1,299, Wyoming at $1,090, West Virginia at $1,073, and Alaska at $1,032 per month for the benchmark silver plan. At these price points, even middle-income individuals face monthly premiums exceeding their mortgage payments. The lowest benchmarks in New Hampshire ($401), Maryland ($414), and Minnesota ($448) still represent a significant share of income for enrollees just above the 400% FPL cliff where subsidies end entirely.

Georgetown CHIR estimates that approximately $35 billion in federal subsidies was lost with the EPTC expiration. Only seven states have launched replacement programs, with New Mexico's full backfill the only one that produced enrollment growth. The structural outlook for 2027 and beyond is a smaller, sicker, more expensive individual market unless federal policy changes or additional states intervene with their own subsidy programs.

Why This Matters for Pricing Actuaries

The 2027 filing cycle is the most challenging rate development environment for individual market pricing actuaries since the ACA's inaugural years. Three structural features distinguish it from prior filing seasons.

First, the credibility problem is acute. Standard loss ratio projections from a stable base period assume that the target-period population is compositionally similar to the experience-period population. That assumption fails when 5% to 20% of the enrolled population exits in a single year, and the exits are correlated with health status. Pricing actuaries must choose between data-intensive individual-level adjustment (using claims-level morbidity scoring for the retained population and modeling lapse as a function of health status) and model-dependent morbidity trending (applying demographic-cell adjustment factors). The Wakely morbidity data provides effectuation-based factors in the 2.9% to 6.5% range, but individual carriers are applying adjustments well outside that band based on their own enrollment profiles.

Second, the feedback loop between rates and enrollment creates a recursive pricing problem. A 22% rate increase will cause additional members to drop coverage, worsening the 2028 risk pool, requiring still-higher 2028 rates. Pricing actuaries filing 2027 rates must simultaneously project the enrollment response to their own rate request, which requires modeling price elasticity of demand by demographic segment. This is a market where the adverse selection modeling framework from prior filing cycles must be recalibrated for a non-marginal subsidy change, not the incremental year-over-year subsidy adjustments of prior years but a structural shift in the subsidy architecture.

Third, Medicaid churn compounds the individual market morbidity shift. As documented in our OBBBA Medicaid churn analysis, 7.8 million projected Medicaid disenrollees are churning through eligibility redeterminations, with some transitioning to marketplace coverage. These Medicaid-to-marketplace transitions introduce a population with different utilization patterns, provider network habits, and chronic disease prevalence into the individual market risk pool. Carriers must model whether Medicaid churn enrollees offset or compound the morbidity deterioration from EPTC-related attrition.

The 2027 regulatory framework adds a fourth dimension. The CMS 2027 proposed rule introduces actuarial value and enrollment changes that interact with carrier pricing assumptions. Rate filing actuaries must integrate these regulatory shifts into their trend projections while navigating the widest assumption uncertainty bands of any post-ACA filing cycle.

For actuaries working outside the individual market, the 2027 ACA filings serve as a leading indicator of health cost trends that will propagate into group markets, stop-loss pricing, and Medicaid managed care rate development. The morbidity shift mechanics and pharmacy trend assumptions embedded in these filings are not ACA-specific; they reflect underlying utilization and unit cost dynamics that affect every health insurance pricing exercise.