Challenges Faced in Enrollment under the Affordable Care Act

Enrollment in the Affordable Care Act (ACA) is facing challenges as some consumers struggle with premium payments, leading to market uncertainties for insurers. This trend may spur insurers to increase rates once more next year, following this year’s significant hikes.

In January, sign-ups decreased by about 1.2 million compared to last year's record enrollment. Enrollees experienced average premium increases of 26%, alongside reductions or eliminations in subsidies for coverage. Experts are closely monitoring how many of the estimated 23 million enrollees will not pay their premiums.

While comprehensive data on premium payments primarily originates from January, some state-run ACA markets have released information for later months. Georgia experienced a notable 28% decline in premium payments in April compared to the previous year, according to healthcare policy analyst Charles Gaba. NOTUS, a news website, reported internal data from the Centers for Medicare & Medicaid Services indicating that about 21% of those using the federal ACA marketplace failed to pay their January premiums, marking a significant increase from last year.

The affordability of healthcare remains a crucial concern for the public. A KFF analysis found that ACA plan deductibles increased by 37%, or over $1,000, from 2025 to 2026, following the expiration of enhanced premium tax credits. This scenario adds pressure on insurers as they adjust to enrollment shifts and market changes.

Reports suggest a potential contraction in the individual market by 2026, with enrollment possibly decreasing by 17% to 26% compared to the previous year, according to an analysis by the Wakely Consulting Group. Wakely's data, involving 75 insurers, shows that 86% of enrollees made their first premium payment in January, though compliance varied across states.

States that offered additional support or experienced smaller premium increases maintained higher payment rates compared to those relying on the federal marketplace. For instance, Georgia, New Jersey, Washington state, and California demonstrate varying levels of payment failures, with New Mexico being an exception due to state-funded subsidies. The current economic landscape, with higher premiums and reduced subsidies, intensifies these trends.

Insurers are expected to carefully monitor these trends, with some anticipating potential double-digit rate increases, although not as steep as this year’s average 26% rise. As insurers prepare for 2027 rate calculations, the trend of declining enrollment alongside increased cost considerations may have significant impacts on pricing strategies and risk management. Actuaries face challenges in predicting future claims and market behavior, particularly in light of regulatory compliance requirements finalized later in the rate-setting process. Despite current uncertainties, insurers remain focused on adapting to evolving market conditions.