A review of ACA individual market claims trends, medical and pharmacy costs, insurer retention, and projected morbidity
Health insurance premiums are rising faster than general inflation. This report examines the forces behind that growth across the commercial market, with a deeper analysis of the ACA individual market.
Using national commercial trend surveys and publicly available ACA issuer rate filings, AHIP and Wakely Consulting Group evaluate how medical costs, pharmacy spending, utilization, morbidity, administrative expenses, taxes, fees, and insurer profit and risk loads contribute to premium increases.
Download the report to understand what is driving health insurance premium growth—and what the data does not support.
DOWNLOAD THE REPORTKey findings
- Average commercial health insurance premiums increased approximately 58% between 2016 and 2025, or roughly $2,747 per covered member.
- Commercial health care cost trend projections generally range from 6% to 10%, substantially above general inflation.
- Commercial claims cost trend assumptions imply cumulative cost growth of approximately 70% from 2019 through 2027, nearly twice the cumulative increase in CPI-U over the same period.
- In the ACA individual market, risk-adjusted claims costs reached approximately $613 per member per month in 2024, nearly 30% above 2016 levels.
- Actual cost growth through 2024 was broad-based, with particularly large increases in inpatient, outpatient, and pharmacy spending.
- Recent premium increases do not appear to be primarily driven by higher insurer retention, administrative costs, or profit loads.
- Issuers projected a substantial deterioration in ACA individual market morbidity in 2026, reflecting expectations of a less favorable risk pool and policy changes including the expiration of enhanced premium tax credits.
What the report examines
The report provides:
- A comparison of commercial health care trend projections and general inflation
- ACA individual market medical, pharmacy, utilization, and unit-cost trends
- Spending changes across major categories of service
- Trends in insurer retention, profit and risk loads, and medical loss ratios
- The role of morbidity assumptions in recent ACA rate increases
- Methodology, data sources, assumptions, and limitations
Why it matters
Premium growth affects consumers, employers, health plans, policymakers, and other health care stakeholders. Understanding whether increases are driven by claims costs, utilization, prices, morbidity, or insurer retention is essential to developing effective strategies for managing affordability.
This analysis helps distinguish between premium increases driven by the underlying cost of care and increases associated with non-claims expenses.
About the report
America’s Health Insurance Plans engaged Wakely Consulting Group to analyze commercial market trend studies and ACA individual market rate filings. The analysis uses publicly available data from 2016 through 2026 Unified Rate Review Templates, including market experience through 2024 and issuer projections through 2026.
