Decline in ACA Enrollment Amid Rising Costs and Subsidy Expiration
Recent data from the Department of Health and Human Services (HHS) reveals a decline in health insurance enrollment under the Affordable Care Act (ACA), with approximately 19.2 million individuals covered in early 2026—a reduction of about 3 million from the previous year. HHS attributes this decrease partly to efforts aimed at curbing fraudulent enrollments, claiming they prevented 1.5 million individuals from improperly receiving subsidies and terminated or blocked another 1.4 million cases by February 2026.
This reduction occurs alongside rising insurance costs and the discontinuation of enhanced premium tax credits. These subsidies, which aimed to lower out-of-pocket costs during the COVID-19 pandemic, expired at the end of 2025. The expiration has been a contentious topic, prominently featuring in government shutdown discussions and legislative negotiations. A House-approved extension is currently stalled in the Senate, with the Congressional Budget Office projecting potential increases in benchmark premiums by 4.3% in 2026 and 7.7% in 2027 without an extension.
An analysis by Wakely Consulting Group indicates that over 10% of ACA enrollees did not make initial premium payments this year, highlighting a trend towards less expensive plans. The KFF nonprofit reported a 58% increase in average premium payments, escalating from $113 to $178 monthly, impacting even those without the enhanced subsidies. Emma Wager, KFF senior policy analyst, questioned the extent of fraud reported by the federal government and emphasized premium increases as a significant factor in the decline in coverage.
Insurance companies have noted rising plan rates due to increased service utilization and complex care needs among ACA members. These include higher rates of emergency room use and behavioral health services compared to those with employer-sponsored plans. Wager stressed that uninsured individuals face substantial financial risks in sudden health emergencies, potentially leading to bankruptcy and depletion of savings.