Arizona regulators are reviewing proposed 2027 health insurance rates as one of the state's largest Marketplace insurers prepares to leave the exchange.
May 29 marked the start of the annual review process following one of Arizona’s top health insurers announcing its exit from the marketplace–highlighting the steadily increasing cost of healthcare in the United States.
Filings for proposed premiums will not be made public until July 31. But healthcare policy experts warn that future costs will reflect insurers' projections for medical spending, prescription drug costs, and the health of the risk pool.
Here’s what to know, as proposals continue to be evaluated, ahead of locked in rates and the marketplace opening for reenrollment on November 1.
Why are healthcare costs going up?
As a series of federal policy changes in 2025 made coverage far less affordable, the Centers for Medicare & Medicaid Services stated that it expects as many as 2 million enrollees to drop coverage. Some of those changes include:
- Limiting coverage eligibility for legal immigrants.
- Adding Medicaid work requirements.
- Requiring Medicaid recipients to reenroll at least two times per year instead of once.
- Expiring tax credits.
- ACA Marketplace open enrollment ending December 15, 2026, a month earlier than previous years.
In 2026, ACA premiums rose an average of 21.7% from the previous year.
Stan Dorn, a policy director for The Health Project at UnidosUS, said that when premiums rise, healthier consumers are often the first to leave coverage, while people with chronic conditions remain insured. That leaves insurers with a sicker and more expensive risk pool, putting upward pressure on premiums.
“Companies are saying ‘we're going to get a lot sicker marketplace here, so we have to raise the price,’” Dorn said.
What is the difference between rates and premium?
The premium is the dollar amount an insured person pays to the insurance company for the insurance coverage. A person, or an employer, usually pays premiums monthly, quarterly, or yearly.
Rates are the cost of a specific plan’s benefits, adjusted for the age, zip code, smoking status, and family size of each possible insurance applicant.
Insurance companies must file charts of all of these possible rates with the Department of Insurance before using the rates to calculate premiums.
Natasha Murphy, health policy director at the Center for American Progress, warns that many Marketplace insurers are requesting 10-20% rate increases, which will ultimately determine premium costs.
CMS anticipates the drop in ACA enrollment will lead to an estimated 3% increase in premiums nationally for 2027.
The timeline for health insurers raising premiums
The key phase for evaluating rate changes typically occurs between May and July, when insurers release detailed filings and actuarial justifications.
According to Kerri O’brien, a spokesperson for the Arizona Department of Insurance and Financial Institutions, proposed rate changes will be posted at ratereview.healthcare.gov on July 31.
The final, approved rates are typically announced in the fall, just before Open Enrollment begins, she said.
O’brien confirmed that eight insurers have filed in the individual market and 12 insurers have filed for the small group market.
According to Murphy, these filings provide a first look at what enrollees can expect to pay for coverage starting January 2027.
The Center for American Progress is an independent, nonpartisan policy institute that often presents progressive viewpoints on economic and social issues.
What happens next?
Throughout the summer, the Division of Insurance will review these requests and supporting documentation to determine if the increases are warranted.
“What insurers initially asked for are not exactly what they end up getting at the end of the summer,” Murphy said.
Regulators review the requests and the supporting documentation to determine whether increases are warranted.
However, Arizona law doesn’t allow the Division of Insurance to approve or disapprove rate increases, but regulators determine whether the proposed rates are reasonable, Murphy said.
In some states, a public comment period allows individuals to share their concerns about rising costs before final decisions are made.
“Public comments may not determine the final rates, but they help increase transparency and accountability,” Murphy said.
Final rates are expected to be approved by late August, giving consumers time to prepare before open enrollment begins on November 1 and ends December 15.
Providers charging more in response to policy changes
The year-over-year hikes are largely attributed to the rising price of medical services, Murphy said.
“Hospitals and other providers are charging larger and larger amounts that insurers have to pay in order to keep these providers in their networks,” Murphy said.
Beyond medical costs, external factors, such as policy, legislative, and regulatory changes, are impacting the "risk pool," or the profile and anticipated costs of the insured population.
The landscape of these increases often varies by the type of insurer, Murphy said. Historically, large for-profit entities have been known to charge higher premiums than smaller, local insurance companies, often due to the size and specific risk profile of their enrollment base.
Impact on vulnerable communities
While many will feel the pinch, Murphy said two specific age groups are expected to be hit hardest. Young adults (Ages 26 to 30): Though generally healthier, this group is often more sensitive to premium increases due to lower income levels.
Older adults (Ages 55 to 64): This demographic naturally faces higher charges based on age and anticipated healthcare needs.
"We are going to continue to see consumers have to make some hard choices as premiums go up,” Murphy said.
Murphy observed that some are downgrading their coverage, for example, by moving from a silver plan to a bronze plan to keep monthly premiums affordable.
She added that this strategy comes with a significant trade-off. Lower monthly costs often result in higher deductibles and increased out-of-pocket expenses.
Cigna is leaving the ACA Marketplace. What does that mean for Arizona?
Cigna announced its departure from ACA Marketplace on April 30, the same day its parent company Cigna Group reported a strong first quarter with total revenues increased 5% to $68.5 billion.
KFF, formerly known as the Kaiser Family Foundation, reports that Cigna’s decision to exit was to focus on other segments, given the lack of potential to grow their ACA Marketplace business. That means about 369,000 members across 11 states, including Arizona, will need to find new coverage for 2027.
With fewer insurers participating in the ACA Marketplaces, remaining insurers will have less competition and consumers will be left with fewer choices.
Fewer participating insurers can mean fewer plan choices and less competitive pressure to keep prices down, Dorn said.
“Suddenly the market has gotten a lot less attractive to insurance companies... it means there's less competition which means prices go up because insurance companies don't feel the need to guard against as many competitors,” Dorn said.
Dorn suggests consumers enrolled in Cigna Marketplace plans actively compare options during open enrollment rather than relying on automatic reassignment to a new insurer.
"It's important for people not to let the algorithm drive the bus," Dorn said. "Instead, proactively shop and make sure they look for a plan that's going to be good for them."
