Challenges Ahead: ACA Subsidy Cuts and Impact on Health Insurance Costs
The conclusion of the enhanced subsidies under the Affordable Care Act (ACA) is set to present financial challenges for numerous policyholders in 2026. Many will face the choice of maintaining their existing mid-level silver plans at increased costs or opting for cheaper, high-deductible alternatives. A recent analysis from KFF, a nonprofit organization focusing on health policy, indicates a substantial rise in average deductibles for ACA plans to $3,786 in 2026, an increase of over $1,000 from the previous year.
KFF data shows a shift in plan selections, with nearly 4 million individuals transitioning from silver to bronze plans, which now include 9.2 million enrollees—an addition of nearly 2 million compared to last year. The overall ACA enrollment has faced a decline, as reported by the Centers for Medicare & Medicaid Services (CMS), with approximately 23 million sign-ups noted for 2026, a reduction from 24.2 million in January 2025. This figure includes automatic re-enrollments, which could result in cancellations if increased monthly premiums—averaging 58% higher according to KFF—are not met.
According to insights from Wakely Consulting Group, which reviewed insurer data across more than 30 states, around 86% of enrollees were current with their January premiums. However, they estimate a potential ACA enrollment decrease of between 17% and 26% from last year. This aligns with KFF's projection that as many as 5 million individuals might forgo ACA coverage this year, due to the expiration of enhanced premium tax credits leading to these losses.
Cynthia Cox, VP and ACA program director at KFF, highlighted the expected nature of these coverage losses due to the cessation of premium tax credits. Meanwhile, perspectives from the Paragon Institute, a conservative organization, suggest that past enhanced subsidies and relaxed oversight may have contributed to fraudulent sign-ups, affecting current enrollment accuracy.
Amid these changes, there remains a broad concern over healthcare affordability among Americans, driven by pressures from rising daily expenses such as gas and housing. A Gallup poll highlights that 60% of Americans fear their ability to afford medical expenses in the event of a serious health condition, with nearly half also worrying about routine medical costs.
Wisconsin-based self-employed residents Kelly Berry and her spouse exemplify the challenges faced by many, as they saw their health insurance costs rise significantly from fully subsidized plans in 2025 to $2,300 monthly for coverage with increased deductibles in 2026. This financial strain has forced them to reconsider their spending habits on various lifestyle expenses while ensuring coverage remains intact is a priority. Berry expressed the difficulty in managing additional expenses, indicating the adjustments necessary in their monthly budgeting to balance financial commitments like mortgage and insurance payments.