Decrease in Health Insurance Coverage in Rural Areas Due to ACA Subsidy Changes

Residents in rural areas involved with the Affordable Care Act (ACA) Marketplace are witnessing a substantial decline in health insurance coverage compared to those in urban and suburban regions according to the Centers for Medicare and Medicaid Services (CMS). The cessation of enhanced healthcare subsidies, introduced through the American Rescue Plan Act of 2021 and later extended by the Inflation Reduction Act of 2022, is a significant factor. These subsidies expanded eligibility for reduced premiums to individuals with incomes at or above 400% of the Federal Poverty Level, around $132,000 for a family of four.

The enhanced subsidies were initially set to end by late 2025, and their renewal was not part of President Trump’s July 2025 budget reconciliation bill. Consequently, many who previously qualified for these subsidies have experienced lapses in their health insurance coverage, leading to increased monthly premiums for a wide array of consumers.

Nationwide, there has been a decline in ACA Marketplace enrollment and a rise in premiums, notably affecting rural or nonmetropolitan counties. These areas saw a 12% decrease during the open enrollment period, impacting 29,000 consumers. Enrollment in small metropolitan counties fell by 11%, affecting about 154,000 consumers, marking the second-largest enrollment decline among county types. Overall, the 30 states utilizing the ACA Marketplace platform in 2026 saw an 8% reduction, impacting nearly 1.4 million consumers.

Data Insights on Enrollment Trends

This analysis relies on data from the CMS County-level Open Enrollment file, providing annual updates on healthcare plan selections and monthly premiums by county. It includes demographic specifics such as age, gender, race, and income levels of plan users. A separate survey by KFF Health News earlier this year revealed that 9% of ACA Marketplace enrollees lost insurance coverage post-open enrollment, while 17% expressed concerns about affording premiums through year-end.

Under the enhanced tax credits, premiums for those above 400% of the Federal Poverty Level were capped at 8.5% of earnings for a silver benchmark plan. This income group significantly contributed to the enrollment decline, making up 27% of the total drop despite representing only 3% of enrollees.

State-Level Mitigation Efforts

Individuals with lower incomes, who continue receiving federal support, have faced premium hikes, but dropout rates in this group were lower. A large proportion of counties experiencing premium increases, even with tax credits, were in nonmetropolitan zones, including 532 out of 778 counties in the highest increase quartile. Certain states have developed strategies to mitigate decreased federal aid. For instance, Colorado's State Legislature introduced the Colorado Premium Assistance fund in 2025 to lower premiums for eligible consumers. Similarly, New Mexico saw an 18% increase in ACA Marketplace enrollments, attributed to the state's health insurance affordability initiatives.