The tens of thousands of Oregonians who buy their own health insurance face double digit increases again next year, with the cost of some premiums surging 25% or more.

On average, individuals buying their own health insurance will pay 16% more in 2027 while small business plans will increase an average of 15.5%, according to recommended rates released Thursday by the state Department of Consumer and Business Services.

Those increases follow an average 10% surge in rates for individual plans in Oregon this year when a reduction in federal subsidies went into effect.

The rate hikes coincide with a drop in the number of individuals buying their own insurance, sparking concern among some industry experts that the insurance market in Oregon could enter what industry observer call a “death spiral” — in which healthy people continue to drop coverage, leading to a sicker group remaining that incur higher per-member costs to insurers and more rate hikes.

Already, two Oregon-based insurers, PacificSource Health Plans and Providence Health Plans, have pulled out of the individual market — the latter because it is shutting down entirely — reflecting concerns over the health of the Oregon market.

When submitting rates, insurers estimate the impact of different factors on their upcoming costs for the year. This year, the premium increases reflect shifts in who is buying the insurance and rising costs for care, medical equipment and pharmaceutical drugs, as well as political uncertainties over whether Congress could restore the subsidies that expired at the end of last year.

The biggest impact reported by insurers was “the loss of the federal subsidies,” TK Keen, the state insurance commissioner, said. “And then you look at market uncertainty, you look at the impact of tariffs, and you know how that’s impacting [the cost of] durable medical equipment and pharmaceuticals.”

When it came to the cost increase caused of healthy people leaving the market, the estimates offered by carriers to justify their rate requests were “all over the board, I think roughly three to seven percent,” Keen added. State regulators decided a 3% increase was appropriate.

Insurers submitted their proposed rates for 2027 in June. State regulators considered them and conditions in the marketplace, trimming them on average by 1.5 points in their recommended rates, which are subject to appeal. The state will issue final rates in September.

The monthly premium recommendations released Thursday vary from a low of about $570 a month for a Kaiser Health Plan to a high of nearly $690 a month for a plan with Moda Health.

In addition to the higher premiums, consumers will have fewer choices with the exit of PacificSource and Providence. Only Moda, BridgeSpan and Regence will sell plans statewide while Kaiser will offer insurance in just 11 of Oregon’s 36 counties.

The premium increases represent averages for a Portland-area resident who buys a mid-range plan — but prices will vary, depending on an individual’s situation and the plan that they buy.

During the pandemic, more than 150,000 people in Oregon bought individual insurance plans, and many of them enjoyed federal subsidies in the form of a tax cut that reduced their monthly premiums.

But enrollment has continued to drop as rates have climbed. Nearly 140,000 Oregonians are currently enrolled in individual plans purchased through the online marketplace, according to the latest state data.

They include nearly 33,000 people insured by Providence while about 16,000 had a PacificSource plan. It’s unclear what those people will do next year when rates spike again.

People are currently paying nearly 60% more on average more for their individual plans this year, with many shifting to coverage with lower upfront costs. Companies are required to offer three tiers of plans — gold, silver and bronze. They generally offer the same benefits but vary in terms of out-of-pocket costs. Bronze plans, for example, have the lowest premiums and highest out-of-pocket costs, while gold plans have the highest premiums and lowest out-of-pocket costs.

The enhanced federal subsidies, which took effect in 2021 during the pandemic, made health insurance much more affordable for 120,000 Oregonians, according to state regulators. Some people who qualified for the subsidy due to their household income and other factors ended up paying nothing for their monthly premium.

The group market in Oregon — like the individual market — also shrunk this year, with Providence no longer offering plans to companies with 50 employees or less and Health Net, a subsidiary of Centene, also pulling out. That leaves six companies selling small group plans.

There, too, recommended rates have soared, with the cost of PacificSource premiums rising the most at nearly 25%. That compares with a recommended increase of 9.5% for Kaiser Health Plans.

In a statement, Gov. Tina Kotek said her office had worked with regulators to slash the requested rate increases from insurers by a total of about $30 million. She blamed federal policies for the increases.

“While the Trump Administration adds uncertainty to healthcare delivery and enacts policies that increase healthcare costs, I am fighting to lower them,” she said. “I am committed to working with the legislature and other partners to find solutions that lower costs for Oregon families as we navigate changes coming down from the federal government.”

The Lund Report is a nonpartisan nonprofit news site focused on health care news in Oregon and southwest Washington. It emphasizes high-quality journalism that promotes awareness and understanding of pressing issues while holding government and industry accountable.