Can't Afford Health Insurance in 2027? What to Do Before You Drop Coverage

The Squeeze Is Real

Let's start by validating what you are feeling: this is not normal premium creep. Insurers finalized increases of roughly 20% for 2026, and the median proposed increase for 2027 is about 15% more on top of that, according to KFF's analysis of 276 insurers. Stack the two years together and marketplace premiums are 30 to 40% higher than they were. If you buy without a subsidy, or off the exchange entirely, you are absorbing every point of that increase yourself.

People are responding the way you'd expect. Effectuated marketplace enrollment fell 13% by February 2026, and analysts project total declines of 17 to 26% as younger, healthier people drop out. That exodus is part of why rates keep climbing: the people who stay are, on average, more expensive to cover.

So no, you are not bad with money, and you are not alone. But before you join the people walking away, work through the checklist below. It is ordered from the biggest potential savings to the smallest, and most steps take minutes, not hours.

Step 1: Re-Check Your Subsidy, Even If You Were Denied Before

The single most expensive myth of 2026 is that "the subsidies are gone." They are not. The enhanced premium tax credits expired at the end of 2025, and that expiration is real and painful. But the original, permanent premium tax credits still exist for households earning between 100% and 400% of the federal poverty level. People hear "subsidies expired," assume all help ended, and pay full price for coverage they could be getting hundreds of dollars a month cheaper.

Your eligibility can also change year to year even if your income doesn't, because the credit is pegged to the benchmark plan price in your county, and benchmark prices moved a lot this year. A household that got nothing in 2025 can qualify in 2027. Run your numbers fresh with our free subsidy calculator before you assume anything.

Step 2: Manage Your MAGI (Legally)

Subsidies are based on your modified adjusted gross income (MAGI), not your gross pay. That distinction is money. Pre-tax contributions to a traditional IRA, a 401(k), or a health savings account all reduce MAGI. If your income lands just above 400% of the federal poverty level, or just above the 250% line that unlocks cost-sharing reductions, a deductible contribution can legally pull you under the threshold and restore thousands of dollars in help.

This matters most for households near the top of the subsidy range, where a few thousand dollars of MAGI can be the difference between a meaningful credit and nothing at all. We cover the mechanics, including what counts toward MAGI and what doesn't, in our guide to the subsidy cliff over 400% FPL.

Step 3: Switch Metal Tiers, but Do the Total-Cost Math

If the premium on your current plan is unaffordable, the answer may be a different tier, not no plan. Moving from Gold to Silver, or Silver to Bronze, can cut your premium substantially. But the premium is only half the equation: a lower tier means a higher deductible and higher cost sharing when you actually use care.

The right comparison is total cost of care: twelve months of premium plus what you realistically expect to spend on doctor visits, prescriptions, and any planned procedures under each plan's deductible and copays. A healthy person who sees a doctor twice a year usually wins with Bronze. Someone managing a chronic condition often loses the premium savings, and then some, at the pharmacy counter. We walk through the arithmetic with worked examples in our guide on downgrading your health plan.

Step 4: Under 250% FPL? The Silver CSR Plans Are the Hidden Deal

If your household income is under 250% of the federal poverty level, do not buy Bronze before you look at Silver. Cost-sharing reductions (CSR) still exist, and they only attach to Silver plans. For qualifying households, a CSR Silver plan quietly upgrades itself: lower deductible, lower copays, lower out-of-pocket maximum. At the lowest income bands, a Silver plan can carry cost sharing better than many Gold plans while priced as Silver.

This is one of the most commonly missed deals on the marketplace because nothing on the shopping screen shouts about it. The plan names look the same. If our calculator or your marketplace application shows your income under 250% FPL, compare the Silver options first.

Step 5: New for 2026: Bronze and Catastrophic Plans Are HSA-Eligible

Under OBBBA, Bronze and Catastrophic marketplace plans became HSA-eligible starting in 2026. That is a genuinely new option for people trying to cut premiums without going bare. The combination works like this: you pay the lower Bronze or Catastrophic premium, open a health savings account, and contribute pre-tax dollars that you can spend tax-free on medical costs, including costs below your deductible.

Contribution limits, eligibility details, and the fine print are in our guide to the new HSA rules for 2026.

Step 6: Compare Every Carrier. Do Not Auto-Renew

In a year when every insurer repriced and several left the market entirely, last year's best deal is frequently this year's worst. Auto-renewing locks in your current carrier's new price without ever showing you the competition, and the carrier that undercuts everyone in your county often changes from one year to the next. The fifteen minutes it takes to compare every plan available in your ZIP code is probably the highest hourly wage you will earn all year. We explain exactly why doing nothing is so expensive this cycle in Don't Auto-Renew Your Health Insurance for 2027.

Step 7: If Your Income Dropped, Check Medicaid and CHIP First

If you lost a job, cut your hours, or your business had a bad year, you may qualify for Medicaid, and your kids may qualify for CHIP even if you don't. Both programs enroll year-round, so there is no deadline to miss, and coverage is free or nearly free. Income limits vary by state, and eligibility is based on your current monthly income, not last year's tax return. If money is the whole problem, this is the first door to knock on, and it costs nothing to apply through your state's Medicaid office or HealthCare.gov.

Step 8: Over 400% FPL? Read the Cliff Guide

If your household earns above 400% of the federal poverty level, you are standing on the subsidy cliff: one dollar over the line and the premium tax credit disappears entirely, with no phase-out. For households near the edge, the MAGI strategies in Step 2 matter enormously, and there are additional moves (and off-exchange considerations) specific to your situation. Start with our dedicated guide to the subsidy cliff over 400% FPL.