The largest source of health coverage for Americans is about to get even more expensive and that could lead to fewer people even having access to it, according to one recent analysis. 

Health policy analysis and research firm KFF recently reported nearly 300 insurers across all 50 states and Washington, D.C., plan to raise their premiums a median of 14% in 2027.  

Insurers say rising medical prices, including for hospitalizations, physician care and prescription drugs, and increased utilization are major drivers of the increases. However, the decline in small group plan enrollments and more small businesses dropping health coverage benefits overall are also contributing. 

About 165 million people in the U.S. have employee-sponsored health insurance. However, access to that coverage varies across income brackets, age groups, industries and the size of employers.  

The number of people in the fully-insured small group market has declined from 17 million in 2013 to 10 million people in 2024, according to the KFF. However, it appears more employers have shifted to self-funded or level-funded plans as participation rates remain steady. 

In level-funded products, employers pay a fixed amount for health coverage, but can be paid back if their members’ actual medical spending is lower than anticipated, according to Health Dive. Such plans are typically less expensive for small businesses with healthy employees. But they aren’t subject to the Affordable Care Act’s benefit requirements, giving insurers wide latitude to raise premiums or decide not to offer coverage.  

“Continued growth in the popularity of alternative coverage options for small businesses, like level-funded plans, has the potential to further erode the fully-insured small group risk pool and could contribute to future premium increases for small businesses, particularly those with sicker employees who may not qualify for or are priced out of a level-funded arrangement,” KFF researchers wrote.