Higher Deductibles, Bigger HSAs and Tax Changes: How To Choose a Health Plan for 2027
Choosing health insurance through the Affordable Care Act (ACA) seems to get more complicated every year. Not only do prices and coverage fluctuate, but changing guidelines can also affect your wallet.
For 2027, health savings account (HSA) contribution limits are rising, some deductibles and out-of-pocket limits are increasing and stricter ACA premium-tax-credit rules could leave some households paying more. Before Marketplace open enrollment begins Nov. 1, here are the key changes to know and mistakes to avoid.
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Changes for HSAs in 2027
An HSA is a tax-advantaged account for qualified medical expenses. You don’t need to be a W-2 employee to have one. A 1099 worker, self-employed individual or business owner can have one if an HSA-eligible health plan covers it, according to GoodRx. Next year, people with qualifying high-deductible health plans can contribute even more, based on the below information, which is beneficial.
Contribute up to $4,500 to an HSA for individual coverage and $9,000 for family coverage, up from $4,400 and $8,750 in 2026, per Fidelity.
People aged 55 and older can make an additional $1,000 catch-up contribution.
The minimum deductible for an HSA-qualified plan also rises to $1,750 for individual coverage and $3,500 for family coverage.
That’s good news and here’s why. Someone in the 24% federal tax bracket who contributes the full $4,500 could potentially save about $1,080 in federal income taxes, before considering any additional payroll-tax savings, explained Peter Diamond, federally-licensed tax, accounting, real estate and structure expert and certified bankability expert (CBE). “The HSA is one of the best tax tools available because you can potentially get three tax advantages: a deduction going in, tax-deferred growth, and tax-free withdrawals when the money is used for qualified medical expenses,” he said. The HSA increase for 2027 also matters to Marketplace shoppers because contributions can lower adjusted gross income, according to H&R Block. HSA contributions can reduce the income used to determine Marketplace subsidy eligibility, potentially increasing a premium tax credit or helping someone qualify for one, said Louise Norris, health policy analyst for healthinsurance.org.
Watch Out for Higher Marketplace Costs
Per KFF, temporary ACA tax credits were implemented to help Americans afford healthcare during the pandemic; however, those expired in 2025, resulting in soaring premiums. But that’s not the only thing causing prices to skyrocket. If your income ends up being higher than estimated, you could have to repay the full amount of excess credits at tax time.
“Don’t treat the Marketplace income estimate as insignificant,” Diamond said. If your income changes during the year, update it because a subsidy today can become a tax bill tomorrow.” Something else to consider is that the benchmark for insurance from an employer has changed. In 2027, the ACA affordability threshold is 10.22% of household income, per the IRS. For a household earning $80,000, that's about $8,176 or $681 a month.
Don't Compare Plans by the Deductible Alone
When shopping for plans, the deductible is only part of the cost. According to Diamond, below are the five numbers to look at.
Annual premiums
Deductible
Copays and coinsurance
Out-of-pocket maximum
HSA and other tax benefits
For 2027, the federal maximum for applicable plans rises to $12,000 for individual coverage and $24,000 for family coverage (per the National Insurance Services), though plans can set lower limits.
Diamond gives the example of a plan that has a $450 monthly premium and an $8,700 out-of-pocket maximum could cost $14,100 in annual premiums and covered in-network medical expenses in a worst-case year. Someone contributing $4,500 to an HSA and in the 24% federal tax bracket could save approximately $1,080 in federal income taxes, bringing that total to about $13,020.
“The premium, hospital exposure, coinsurance and maximum out-of-pocket cost are what determine how expensive the plan can actually become,” Diamond said.
Check the Coverage, Not Just the Price
Obviously, the cost of healthcare is important, but so is the coverage. Shoppers should check whether their doctors are in-network, if their prescriptions are covered and how much they'll pay for specialists, hospitals and other care, Norris said. “Some of the most common mistakes include letting coverage auto-renew each year without comparison shopping during open enrollment, or focusing primarily on premiums rather than looking at all aspects of the available plans,” she explained. Signing up for healthcare can be a challenge, but knowing your budget, what you need from your plan and how to compare total costs can help you choose coverage that fits your health care needs and finances.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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