Health insurers are losing money in the individual market, and consumers could ultimately bear the cost through higher premiums, reduced benefits, and fewer plan choices.
Jae Oh, author of “Maximize Your Medicare,” said preliminary filings suggest that premiums could rise substantially in 2027. Some insurers also may withdraw from markets where covering policyholders has become unprofitable.
That will make comparison shopping more consequential. Consumers may need to weigh a higher monthly premium against the deductibles, benefits, and financial exposure that can accompany a less-generous plan.
Below is a transcript of the interview with Oh, edited for brevity and clarity.
What insurer losses could mean
Bob Powell: Losses are piling up for health insurance companies, and that could create problems for people enrolled in Affordable Care Act plans. What do consumers need to know?
Jae Oh: We have seen many headlines about the premium tax credit ending at the end of 2025. Once people saw the full sticker price of their health insurance premiums in 2026, on top of persistent increases in the cost of living, cancellations occurred across the board.
Enrollment declined by roughly 20% from 2025 to 2026. That is a rough figure.
Policyholders are under financial stress, but so are insurers. Doctors and hospitals are experiencing their own pressures, and each part of the health care system has data showing elevated financial strain.
Individual insurers are taking it on the chin.
Why lower enrollment may raise costs
Powell: Wouldn’t lower enrollment reduce insurers’ expenses?
Oh: Lower enrollment won’t necessarily translate into lower losses because the people who stay in the plans are the costly people to the carrier.
Although premiums increased in 2025, the cost of serving policyholders rose even faster, according to recent data. The difference was roughly 10%. That is stunning.
How much premiums could increase
Powell: What should people enrolled in these plans do? Should they expect to absorb additional premium increases as medical expenses continue to climb?
Oh: I think higher premiums are inevitable. We have already seen preliminary, state-by-state filings for 2027.
I would use 12% to 15% as a working estimate for the average premium increase, almost irrespective of where you live. In some places, the increase could be higher.
Should consumers choose leaner coverage
Powell: How are households responding to those increases?
Oh: Some households have reduced the quality or degree of benefits in their plans. Someone enrolled in a more robust plan may move to one offering fewer benefits. We have seen that happen, and we will likely continue to see it.
That is not necessarily bad. It has made people think about what insurance actually is.
Health insurance should not be misunderstood as a coupon or voucher. It is a protective measure that people purchase to protect themselves from catastrophic loss. That is the function of insurance.
For very healthy people, moving to a less-robust plan may make sense.
What insurance is designed to do
Powell: Insurance traditionally protects against events that occur infrequently but could produce severe financial losses. Have we come to misunderstand the purpose of health insurance by treating it as a coupon or voucher?
Oh: Yes. People encounter many different narratives through social media, news reports, and conversations with friends. Those narratives, along with behavioral biases, can distort the takeaway.
People should keep the larger purpose of insurance in mind so they can make the best decisions for themselves.
Why insurers may leave markets
Powell: Health plans reportedly recorded nearly $10.4 billion in losses in 2025. What could that mean for individual consumers?
Oh: Insurers have several levers. The first is that they can simply withdraw from a market.
We are going to see that in the individual market in 2027, with large carriers withdrawing entirely from certain locations.
We have seen something similar in Medicare. Medicare Advantage carriers have exited certain markets.
Insurers also have reduced payments to insurance producers, including me, in certain locations. That can limit enrollment. A carrier may remain in the market but discourage a large influx of members because some of those members are likely to generate losses.
Individual households will have to contend with those changes. Keeping up to date on available plans has always been wise, but it will become even more important over the next several years.
