Texas Health Insurers Seek 13.1% Premium Hike as Subsidy Era Ends

The Affordable Care Act marketplace in Texas enters open enrollment next week with rates poised to climb for the second year in a row. Insurers have proposed a median monthly premium increase of 13.1% for 2027, a figure that applies to nearly 3.3 million Texans currently enrolled in ACA plans. This rise follows a finalized 20% median increase for 2026, according to data from the Peterson Center on Healthcare and KFF.

The proposed Texas hike is slightly lower than the national median increase of 15% for the same period. If finalized, these figures confirm a pattern of double-digit cost jumps that began with the 2026 rates. The Centers for Medicare & Medicaid Services reported that 3.3 million residents held ACA marketplace coverage as of February this year. Nationwide, approximately 3 million fewer individuals held ACA plans in February 2026 compared to the same month in 2025.

Researchers at Georgetown University identify the expiration of enhanced premium tax credits as the primary driver of these cost changes. Congress introduced these enhanced credits in 2021 to bridge coverage gaps during the pandemic, and they subsidized plans for 22 million people in 2025. The credits expired after the longest government shutdown in U.S. history, a period during which Democrats argued against reopening the government unless Republicans maintained the ACA subsidies.

The Peterson Center on Healthcare and KFF also cite inflation, medical labor shortages, rising pharmaceutical costs, and shifts in claim severity as contributing factors to the premium spikes. As more people lose coverage due to the loss of enhanced credits, healthcare providers face higher costs from the growing uninsured population. Ashleigh Alvarez, senior program manager for Foundation Communities’ Prosper Health Coverage program, noted that these costs often transfer to insured individuals.

"That [rise in cost is] because of all the uninsured people and the healthcare providers trying to find some balance to recoup expenses," Alvarez said. "It all falls on people who have insurance, which isn't fair. However, if people were able to be eligible for these premium tax credits to help them pay for insurance … then that would remove the additional risk of more uninsured people."

Standard ACA tax credits remain available for individuals and households earning between 100% and 400% of the federal poverty line. For a single person, this income bracket ranges from $15,960 to $63,840 annually. Alvarez emphasized that applicants must file taxes to verify eligibility, warning that the IRS and healthcare.gov share data. "If people have not filed taxes in past years, the marketplace can deny them the ability to enroll in a marketplace plan for 2027," she said. "A lot of people don't realize that the IRS and healthcare.gov talk to each other."

Eligibility for premium tax credits will also tighten based on immigration status starting next year. Under recent federal policy changes, only U.S. citizens, green card holders, certain immigrants from Haiti and Cuba, and immigrants from three small North Pacific nations will qualify for subsidies. Other statuses, including refugees, asylum seekers, and visa holders, will no longer receive these government payments. Alvarez said this change may lead more immigrants to forgo coverage, further increasing costs for the insured.

"Anyone who doesn't have citizenship or lawful permanent residence is not going to be eligible for premium tax credits through the marketplace anymore," Alvarez said. "Because they're not eligible … that is going to mean that they're not able to afford insurance through the marketplace anymore. The gap of people who are uninsured in our country is going to increase significantly."

The financial impact is visible in individual cases. Alvarez described a couple she assisted during last year's enrollment who paid $50 per month for their plan in 2025. When they returned for 2026 enrollment, their premium had risen to several hundred dollars monthly. "When we're talking about cost of living, especially here in Austin, it's already a challenge in and of itself," Alvarez said.

Local organizations including Health Alliance for Austin Musicians, Good Work Austin, and RAISE Texas offer financial aid to help pay for premiums. Foundation Communities also maintains lists of clinics providing dental, vision, and sexual healthcare services for those without insurance. "We're at least going to be able to provide them [with] those additional resources," Alvarez said, "so that they can still have access to healthcare even without having health insurance."