From contracting battles to vertical integration scrutiny and continued prior authorization tensions, few things in healthcare are as predictable as the backlash insurance companies consistently face from lawmakers, employers and patients.
Heading into 2027, those pressures are compounding.
Big names amp up the heated rhetoric
Sens. Elizabeth Warren, D-Mass., and Josh Hawley, R-Mo., introduced the “Break Up Big Medicine Act” earlier this year, which would prevent companies from owning both a health insurer or pharmacy benefit manager and a medical provider or management services organization. Mark Cuban, the billionaire entrepreneur behind Cost Plus Drugs who has been building a portfolio of healthcare businesses aimed at bypassing the traditional payer model, previously backed the bill.
Ms. Warren and Mr. Cuban both took to X in August to renew pressure on health insurers, reaching their combined following of 15.2 million. Ms. Warren advocated for her bill, and Mr. Cuban called for divestment from insurers.
“If you own shares in a fund that owns any of the biggest insurance carriers, you are part of the cost of healthcare problem in this country,” he wrote.
While the bill has not advanced and divesting from major insurers would be a herculean task given their presence in index funds, 401(k)s and the broader economy, the critiques are adding to a broader narrative shaping public perception of insurers, and they aren’t the only source of pressure.
The court case everyone is watching
Luigi Mangione’s state trial over the killing of UnitedHealthcare CEO Brian Thompson begins in September, drawing more negative attention toward the insurance industry after already serving as a flashpoint for public frustration over coverage denials and claims practices throughout much of last year.
Mr. Mangione has amassed more than $1.5 million in donations to his legal defense fund, and his attorneys recently requested expanded media access to the trial.
Employers and their workers grapple with costs
Employers and their workers are bearing the brunt of rising costs, and as some of the most powerful purchasers of health coverage, their shifting strategies reflect growing dissatisfaction with the traditional payer model.
Released in May, Milliman’s 2026 Medical Index projected that employer-sponsored healthcare costs will grow from $7,838 to $8,460 for the average American between 2025 and 2026. This marks the sharpest annual increase in more than a decade, excluding pandemic-era fluctuations. Pharmacy and outpatient services together account for roughly 69% of that growth, according to the index.
PwC projects medical costs in the commercial group market will rise 9% in 2027, the highest medical cost trend in 17 years, based on a survey of 27 health plans. The plans pointed to provider adoption of AI documentation and coding tools, reimbursement pressure and consolidation, pharmacy spending, behavioral health utilization and out-of-network payment disputes as key drivers.
While employers are still footing most of the bill, they’ve been trying to offload responsibility as costs climb. Employers’ share of healthcare costs declined from 61% to 58% since 2005, with employees’ premium contributions growing from 21% to 27% over the same period.
Shifts away from traditional insurance models also signal employers’ waning tolerance for steeper costs. For one, direct contracting has been picking up steam. Mr. Cuban himself has been getting in on the action, launching Cost Plus Wellness, a platform bringing together self-insured employers and providers with publicly posted contracts that aims to cut out the insurance middleman.
A 2025 Mercer analysis suggests employers are also weighing alternative plan designs, including high-performance networks and variable copay plans.
‘Medicare for All’ as a test
Growing support for the “Medicare for All” movement points to another emerging front in the public’s frustration with private insurers and rising costs, though recent polling suggests that frustration has not translated into a broad willingness to abandon private coverage.
A recent poll conducted by Tavern Research on behalf of the Searchlight Institute tested the idea of automatically enrolling every American in a government-run health insurance plan like Medicare. The idea garnered net total support of 33 percentage points, though support fell to 11 points when respondents were told the plan would replace private and employer-sponsored coverage and be funded through higher taxes. Seventy percent of respondents said they would prefer to keep their current insurance if given the option.
As healthcare affordability issues mount, a Century Foundation survey from late May found two out of three registered voters want either new public insurance options or a complete system overhaul. And heading into the midterms this fall, voters on both sides of the aisle say the cost of insurance is the biggest problem facing the healthcare system, according to a new survey of 25,000 people from the Commonwealth Fund.
The fallout of steep medical costs
For 2027, ACA marketplace insurers have proposed a median rate increase of 15%, according to a Peterson-KFF Health System Tracker analysis, marking the second year in a row insurers have pitched a double-digit rate hike. Insurers attributed the individual market increases to the rising medical trend, including costlier hospitalizations, physician visits and prescription drugs. The expiration of the enhanced premium tax credits at the end of 2025 is another factor, with KFF estimating that roughly 4 percentage points of the proposed increases stem from a shift toward a smaller, sicker risk pool as healthier enrollees have left the marketplace.
Small group plans face similar premium pressure, though for a different population and without the same tax-credit effect. The median proposed increase there is about 14% for 2027, with insurers citing factors that include inflation, labor supply issues, claims severity, GLP-1s, provider consolidation and No Surprises Act disputes.
Medicare Advantage insurers are also pivoting amid cost pressures specific to that market, including a widening gap between federal payments and the cost of care. Humana, for one, plans to “adjust” MA benefits in 2027. The insurer will also step away from MA plans covering 600,000 people in 2027 but hopes to recapture some of that volume.
Some payers are walking away from products entirely next year, with Molina Healthcare abandoning its MA Part D product due to underperformance, and several insurers exiting or reducing their presence in the ACA marketplace.
Medicaid concerns persist
HR 1 laid out work requirements and more frequent eligibility checks for the Medicaid expansion population in 2027, threatening the viability of some managed care programs.
While some of the country’s largest insurers, such as Centene and Elevance Health, have expressed confidence in their positioning, enrollment drops are still on the horizon. In 2025, the Congressional Budget Office estimated 5.3 million people would become uninsured as a result of the community engagement rules by 2034. Even those who fulfill work requirements risk losing coverage as they navigate the verification process with state Medicaid agencies.
Some states are permitted an early rollout of work requirements, with Nebraska being one of them. All eyes are on the state as it progresses with work verification checks, which began in August. On a July earnings call, Molina President and CEO Joseph Zubretsky said Nebraska is the “only real data point” on work requirements so far. He added that concerns around the definition of “medical frailty,” self-attestation use and legal challenges linger more broadly.
A growing financial toll
According to a HealthScape Advisors analysis, 73% of health plans recorded an operating loss in 2025, up from 70% in 2024 and 54% in 2023. Losses were most common among Blues and regional plans, but the rate among national carriers also surged to 43%, up from 14% in 2023 and 2024. More than two-thirds of plans logged at least three consecutive years of operating losses during the 2023-2025 period, up from 12% during 2020-2022.
In parallel, the broader insurance industry has been losing jobs at more than four times last year’s pace, according to new Bureau of Labor Statistics data, as insurers exit markets, automate operations and face budget constraints.
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