ACA Marketplaces See 5 Million Drop Coverage Due to Rising Costs

The Affordable Care Act (ACA) marketplaces are experiencing a significant decline in enrollment, with projections estimating up to 5 million individuals may forgo their health insurance policies this year, according to a KFF analysis.

Initial figures revealed a decrease of about one million enrollees compared to the previous year. However, experts, including insurers and health policy analysts, had anticipated a worsening situation as affordability issues led many to drop their plans.

The expiration of enhanced premium tax credits at the end of last year is a primary factor contributing to the drop in enrollment. Although Congress nearly reached a compromise to extend these subsidies, the agreement ultimately did not materialize.

“Costs went up significantly and a lot of people dropped their plans,” stated Cynthia Cox, a co-author of the study.

The KFF report, utilizing data from the Centers for Medicare & Medicaid Services, state-based marketplaces, and other sources, forecasts a steep enrollment decline from 22 million in 2025 to approximately 17 million in 2026, corroborating similar findings by CMS.

While some of the 5 million individuals leaving the marketplaces may have found alternative coverage, most likely remain uninsured, according to Cox.

“Those who stayed [in the marketplaces] are paying more, either in the form of higher premiums or higher deductibles or both,” she explained.

Last fall, KFF had anticipated a doubling of average premiums. This has resulted in many opting for lower-tier plans with higher deductibles or dropping their coverage entirely.

Cox warns that uninsured individuals face greater financial risks in medical emergencies, while those with coverage might still struggle with affordability due to increased premiums and deductibles.

Notably, last year saw deductibles rise by an average of $1,000, marking a stark increase.

On a more positive note, Cox suggests insurance companies have accurately predicted the current scenario, potentially preventing another significant market adjustment in the near future. She adds, “It might mean that we don’t see a lot of insurers needing to do another big market correction.”

The forthcoming insurance rate filings will reveal whether this situation represents a temporary adjustment or the new standard for the ACA marketplaces.