New ACA rates pinching Pennie’s users

Sharply higher 2026 insurance costs – including, most notably, for the legions who’d previously been subsidized through the state’s insurance marketplace – prompted thousands of Pennsylvanians to drop their health coverage this year.

Today, it became clear that the trend line going forward remains grim – and those dependent on Pennie, the commonwealth’s Affordable Care Act marketplace, will have to reach still deeper into their pockets for coverage in 2027. Individual Pennie insurance premiums will increase by nearly 16% next year, while group plans will increase by more than 10%, according to the Pennsylvania Insurance Department, which is tasked with approving annual rate increases.

“Unfortunately, health care cuts by the federal government continue to drive up costs,” said Michael Humphreys, the state’s insurance commissioner, in a statement on Tuesday. “We understand that these rate increases are rough on Pennsylvania families and businesses, and we fought insurers for every savings we could reasonably assert.” 

Humphreys attributed the rate hikes to a combination of factors that are broadly driving up healthcare costs and insurance rates, as well as specific federal policy changes. 

In 2026, Congress failed to renew enhanced premium tax credits that had made Pennie coverage affordable for many consumers, resulting in the largest single-year rate increases in the marketplace’s history. With Pennsylvania’s average out-of-pocket cost more than doubling – and in some cases, tripling or quadrupling – more than 50,000 state residents had canceled their plans as of last month.

Additionally, the 2025 federal spending bill known as the One Big Beautiful Bill contained drastic cuts to Medicaid – including work requirements – are expected to result in some 300,000 Pennsylvanians losing Medicaid health coverage in 2027, according to the Hospital + Healthsystem Association of Pennsylvania. 

The organization has sounded the alarm over the financial impact of rising numbers of uninsured people on the state’s hospitals, which are typically reimbursed by both public and private players at rates below the cost of care, and expect to lose an additional $4.5 billion in direct funding over the next decade.

All the newly insured people “still need care, and the cost of treating them lands on hospitals and on everyone who still pays a premium,” said the state Insurance Department in its statement.

Across the nation, costs have been soaring for both medical care and prescriptions. According to Humphreys, in 2025, the state’s individual and small-group market insurers paid $845 million more for medical and prescription drug claims than in 2024 – a 13% increase. The Insurance Department, he explained, must balance the needs of both insurers and consumers, aiming to keep coverage as affordable as possible.

Open enrollment for 2027 Pennie plans begins on Nov. 1.