According to a recent KFF analysis of preliminary rate filings, ACA Marketplace insurers are suggesting a median premium hike of 7% for 2025. This is quite similar to the 6% increase that was proposed for 2024. The proposed rate adjustments from insurers, which predominantly range from 2% to 10%, are subject to change during the review phase.

While the majority of Marketplace participants benefit from subsidies and are unlikely to bear these increased costs directly, rising premiums typically lead to augmented federal expenditures on subsidies. Additionally, the reasons put forth by insurers for these premium adjustments provide insights into the broader factors influencing health spending.

KFF’s analysis of publicly available documents reveals that insurers attribute the escalation in premiums for 2025 to rising healthcare costs, specifically for hospital services, alongside an uptick in the utilization of weight loss and other specialty medications.

This year, the surge in costs that insurers encounter for medical services appears to have a more significant impact on premiums than the increase in care usage. Insurers highlight that workforce shortages and the consolidation of hospital markets, which exert upward pressure on healthcare costs and prices, are contributing to the rise in health insurance premiums for 2025.

Simultaneously, the escalating demand for GLP-1 medications like Ozempic and Wegovy, which are prescribed for diabetes and obesity, is driving up spending on prescription drugs.

The complete analysis and additional information regarding health costs can be accessed at the Peterson-KFF Health System Tracker, an online platform committed to tracking and evaluating the performance of the U.S. healthcare system.