Health insurance premiums rival mortgage costs as 2027 could see huge rate hikes

Audio By Carbonatix

(The Center Square) – The total cost of employer-sponsored family health insurance now exceeds the median monthly mortgage payment for recent homebuyers, but employers cover most of that insurance bill.

The average employer-sponsored family plan cost $26,993 in 2025, according to KFF’s latest annual survey. That works out to $2,249 per month.

The Mortgage Bankers Association reported a national median mortgage payment of $2,198 for purchase applicants in May 2026. That made the total cost of the average family health plan $51 per month higher than a mortgage.

The figures are not a direct comparison of two household bills. Workers paid an average of $6,850 toward family coverage in 2025, or about $571 per month. Employers paid the remaining $20,143. The mortgage figure reflects the payment listed in a purchase application.

Yet, the insurance premium is part of an employee’s total compensation and its size shows how much health coverage now costs before a family pays deductibles, copays or coinsurance.

The comparison comes days before the federal government releases a more thorough look at proposed 2027 rates in the individual and small-group markets. The Centers for Medicare and Medicaid Services plans to post those filings Friday, July 31.

Early filings already point to another year of large increases. KFF reviewed proposals from 77 Affordable Care Act Marketplace insurers in 16 states and the District of Columbia. The median requested increase was 14%. Twenty insurers sought increases of more than 20%.

The median final increase for 2026 was 20%. KFF said typical Marketplace premiums would rise by more than one-third from 2025 through 2027 if the latest requests take effect.

Mark Merritt, executive director of the Insurance Watchdog Coalition, said the cost raises a broader question about the value families receive.

“Health insurance premiums are beginning to stifle the American Dream. Families shouldn’t have to choose between owning a home and paying their health insurance premiums. When one monthly bill starts competing with the mortgage, Americans have every right to ask a simple question: Is health insurance still worth it?” Merritt said in a statement provided to The Center Square.

The coalition is an advocacy group that campaigns against the power of large insurance companies. Merritt previously led the main trade group for pharmacy benefit managers and worked as a strategist for the health insurance industry.

The value question does not end with premiums. The average ACA Marketplace deductible rose 37% to a record $3,786 in 2026, according to KFF. The coalition also points to narrower provider networks, more prior authorization rules and higher out-of-pocket costs.

Insurers cited higher hospital, doctor and prescription drug costs as major reasons for their 2027 requests. KFF said labor costs and general inflation have also pushed medical costs higher. It expects the underlying cost of medical care and prescription drugs to rise 10% for 2027.

The end of the enhanced federal premium tax credits also changed the market. KFF found that out-of-pocket premium payments rose by an average of 58% in 2026 after the credits expired. Insurers said healthier people then left the market, which made the remaining group more expensive to cover. They estimated that shift added about four percentage points to 2027 requests.

The rates released Friday are merely proposals. State and federal regulators can approve lower increases. CMS plans to publish final rate information by Oct. 30.