Rising costs for hospital care, cancer medications and GLP-1 weight-loss drugs are driving up private health insurance premiums at the fastest pace since Obamacare took effect.
Gerard Anderson, a health policy and management professor at Johns Hopkins University, told The Washington Times that private health insurance premiums will rise 6% to 10% for 2027.
He said that’s up from a 4% increase in recent years, and closer to an average increase of 8% between 2000 and 2010.
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“What’s different this year is the premiums are going up faster and more healthy people are dropping coverage, leaving only the sickest people buying insurance,” Mr. Anderson said in a phone interview. “Part of it is inflation, but costs have also gone up for hospitals and pharmaceuticals, and it’s all just bad.”
He identified GLP-1 drugs as the top driver of rising costs, followed by new cancer medications and gene therapies for children that cost millions of dollars for a one-time treatment.
The annual price of Keytruda, the brand name for the immunotherapy drug pembrolizumab, has risen from roughly $150,000 when the FDA approved it in 2014, to about $210,000 this year. Doctors prescribe the drug to treat lung, skin, breast, bladder, and gastrointestinal cancers.
“It’s hard to justify paying for a 6% to 10% increase in premiums if your wages only went up 3% this year,” Mr. Anderson said. “A lot of healthy people are just saying, ’I hope I don’t get sick this year.’”
PricewaterhouseCoopers International Limited projects that medical costs in the private group insurance market will rise 9% in 2027, the highest in 17 years. It projects an 8.5% rise in the individual market, which includes Affordable Care Act plans.
PwC analysts tracked steep annual cost increases of 9% to 12% from 2007 to 2010, which they have said helped push the Affordable Care Act through Congress. Annual increases then slowed gradually to a 5.5% low in 2017.
PricewaterhouseCoopers blamed the latest increases on AI-enabled documentation and coding tools helping medical providers charge more per medical claim. It also cited GLP-1 drugs, oncology medications and pharmacy costs as other top factors.
“Not only are pharmaceuticals and medical supplies more expensive, but consumers are going to the doctor now more than ever and their needs are getting more complex,” said Felicia Sadler, a registered nurse and clinical effectiveness consultant at Relias, a North Carolina-based healthcare software company.
“Hospitals are treating more patients who need more intensive care, and the drugs and technology used to treat them cost more,” she added. “Funding the workforce has also risen in cost, largely because there are more patients to treat and it’s taking more resources to treat them. “
According to the American Hospital Association, U.S. hospitals spent more than $1 trillion on their workforce in 2025, up 5.6% from 2024.
The association found that other costs grew even faster. Drug expenses rose 13.6%, and supply spending jumped 9.9% over the same period, pushing total hospital expenses up by 7.5% for the year.
Hospital inpatient volumes rose 5.3% in 2025, while outpatient visits climbed 9.8% as more routine care moved to ambulatory settings.
An aging population and increased mental health demand since the pandemic have also contributed to rising costs.
Thomas Plante, a psychology professor at private Santa Clara University in California, said many therapists in Silicon Valley now charge $400 or more for a session.
“Most therapists I know are very busy and many have long waiting lists, too,” Mr. Plante said. “Those working at the large facilities like Kaiser Permanente have even gone on strike due to overwork and pressure to see more patients and move them out quickly to accommodate others.”
Public costs
Public health insurance premiums are also rising.
The Centers for Medicare & Medicaid Services finalized a 6% increase in the Medicare Part D base premium and a 13.8% increase in the Part D deductible for 2027.
Medicare trustees project that the standard Part B premium will rise about 3.3%.
Separately, the federal agency estimated in June that U.S. healthcare spending will increase from $6 trillion this year to $9 trillion by 2034.
“We’ve long seen a steady increase in year-over-year health care costs outpacing inflation, partly attributed to recent policy changes as well as economic inflation,” said Shaina Goodman, vice president of policy and government affairs at Community Catalyst, which advocates for affordable healthcare.
Benchmark premiums for ACA Marketplace plans will rise an average of 13% in 2027, following a 26% jump this year, according to KFF, an independent health policy think tank formerly known as the Kaiser Family Foundation.
Chris Malone, CEO of Fidelum Health, a research firm advising the Mayo Clinic and other major healthcare organizations, said that patient surveys have flagged a worrying loss of faith in medical providers as another factor driving up costs.
He said that more Americans have shunned vaccines as a result, leading to an eighteen-fold increase in reported measles cases so far this year compared with 2024.
“Vaccine hesitancy is a good example of how distrust eventually becomes a healthcare-cost issue,” Mr. Malone said. “When people avoid inexpensive prevention such as vaccination, the healthcare system eventually pays for outbreaks, emergency treatment, hospitalization and complications that might otherwise have been avoided.”
Trump cuts
Some policy analysts also cited federal budget cuts under the Trump administration as another factor driving up healthcare costs.
The Republican-led Congress allowed enhanced Obamacare premium tax credits to expire last year. In July 2025, the One Big Beautiful Bill Act authorized cutting more than $1 trillion of federal health subsidies.
“The federal budget law adds new eligibility and work requirements and reduces federal Medicaid funding over the next decade, which hits rural communities hard,” said Dr. Greg Carroll, a California physician and CEO of the healthcare company ClinNEXUS.
KFF reported that average monthly ACA Marketplace premium payments rose 58% in 2026, while average employee contributions for employer-sponsored family plans increased 9%.
KFF found that annual premiums for employer-sponsored family health coverage increased by 5% from last year to $28,303 this year. Covered workers contributed $7,471 toward this cost.
Reached for comment, a White House official pledged that new Medicare policies finalized last week will “meaningfully lower healthcare costs for seniors on commonly-used drugs and imaging services like bone density scans and X-rays.”
According to the official, Americans have already saved “well over $1 billion” through TrumpRx.gov and the Medicare Bridge program, which lowers GLP-1 copays for select Part D beneficiaries.
“President Trump has taken every step to lower costs and root out fraud in healthcare to put American patients first,” said Allison Schuster, an assistant White House press secretary.
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