Impact of Rising Premiums on Health Insurance Enrollment Stability
Industry experts have expressed concerns about the stability of federal health insurance exchange enrollments amid rising premiums and the end of enhanced COVID-19 subsidies. Recent figures from the Centers for Medicare & Medicaid Services (CMS) reveal a slight decline to 15.6 million participants by December 2025, marking a 4% decrease from the previous year.
The conclusion of enhanced subsidies on January 1 has placed added pressure on enrollees, with premiums anticipated to more than double for many, particularly those with higher incomes. Reports indicate an overall gross premium cost surge of 26% for 2026, potentially impacting enrollment trends and the insurance industry at large.
Brian Blase, president of the Paragon Health Institute, suggests that persistent highly subsidized zero-dollar premium plans and automatic reenrollment may contribute to fraud and inflated enrollment figures. His report highlights the risk of a significant number of enrollees being unaware of their coverage or not existing at all.
Blase explains, "In a normal market, soaring prices should lead to lower demand and fewer purchases, as consumers explore alternatives." This statement illustrates the disruptive nature of subsidies and automatic reenrollment, which could compromise proper enrollment management and regulatory compliance.
Regulatory Compliance and Fraud Prevention
The CMS is actively addressing potential fraudulent activities, updating their findings to include dual enrollments across Medicaid and Obamacare programs. A December Government Accountability Office report underscored substantial fraud potential within Obamacare subsidies, resulting from challenges in identifying improper enrollments.
Recent legislation, such as the One Big Beautiful Bill Act, seeks to strengthen enrollment validation by enforcing stricter income and immigration status checks starting in 2028. However, this Act doesn't tackle the core issue of zero-dollar premiums, which Blase argues should be a focal point in future policy revisions.
Looking ahead, congressional debates are expected to revisit subsidy reforms as COVID-19-era financial supports expire. Both Republican and Democrat lawmakers will likely discuss enrollment practices and necessary structural adjustments to enhance the integrity of the insurance marketplace, ensuring regulatory compliance and minimizing risks for payers and providers.