Nearly 5 million fewer Americans are projected to enroll in Affordable Care Act (ACA) health insurance this year, according to a new analysis from the healthcare research nonprofit KFF. The study estimates that marketplace enrolment will fall from 22.3 million in 2025 to approximately 17.5 million in 2026 — a reduction of more than 20% and a steeper decline than initial federal data had indicated. Plan selections during the 2026 Open Enrollment Period already fell by over a million to 23.1 million people, the sharpest single-year drop since the ACA marketplaces launched. Wakely Consulting Group has estimated that average ACA enrolment could contract by 17% to 26% this year, while the Congressional Budget Office had previously projected a roughly 25% contraction.
Those who maintain coverage face sharply higher costs. The average enrollee’s deductible has risen by $1,027 — a 37% increase — to a record high of $3,786, the steepest jump since the marketplaces opened in 2014. Monthly premium payments have climbed by 58% on average, from $113 to $178. Cynthia Cox, a vice president at KFF and co-author of the report, said: “No matter how you slice it, people are paying more.” The jump in premiums was lower than KFF’s earlier projection of a 114% increase, partly because many consumers downgraded to lower-premium, higher-deductible plans. The share of enrollees selecting Bronze plans — which carry the lowest premiums but highest deductibles — rose from 30% in 2025 to 40% this year. As Cox put it, “People are trying to hang on to their health insurance coverage any way they can, even if that means they have a deductible of $7,000.”
Middle-income Americans hit hardest
The most striking feature of the enrolment collapse is its concentration among middle-income Americans — those who earn too much to qualify for the remaining income-based subsidies but not enough to afford coverage without the enhanced COVID-era premium tax credits that expired on 1 January. These subsidies, first introduced under the American Rescue Plan and extended through 2025 by the Inflation Reduction Act, had made coverage affordable for millions. Their expiration has created what analysts call a “subsidy cliff”. Consumers with incomes between 400% and 500% of the federal poverty level made up just 7% of 2025 enrolment but accounted for nearly half — 48% — of the decline in plan selections from 2025 to 2026. Many were automatically renewed into plans from the previous year that became far more expensive after the subsidies lapsed. When monthly fees became unaffordable, they lost coverage.
ACA plans have long been a lifeline for working-age Americans who do not qualify for Medicaid, including gig workers, farmers, ranchers and hairstylists. Farmers in particular have warned that sharp increases in health insurance costs could stunt farm growth and push some producers out of business. Younger adults aged 18 to 34 saw the largest enrolment declines of any age group, while older adults aged 50 to 64 — who make up a large share of marketplace enrollees and face age-related premium rises — have also been disproportionately affected. Women, who constitute more than half of marketplace enrollees, are expected to be significantly impacted by coverage losses and increased costs, potentially widening existing health disparities.
Enrolment drops were observed across most states, with North Carolina recording the largest decrease at 22%. Other states with significant declines include Ohio, West Virginia, Indiana, Delaware and Arizona. However, states that operate their own exchanges retained a larger percentage of enrollees compared with those relying on the federal marketplace. New Mexico bucked the national trend by reporting enrolment increases, thanks to state-funded subsidies that mirror the expired federal tax credits.
Fraud claims, policy changes and political fallout
The Trump administration has asserted that federal efforts to combat fraud within the ACA programme are largely responsible for this year’s enrolment declines. The Centers for Medicare and Medicaid Services (CMS), whose final 2026 enrolment data is not yet public, did not immediately respond to a request for comment on KFF’s report. The administration has proposed a “program integrity” rule that would require more information to prove eligibility for subsidies and special enrolment periods, and would charge automatically re-enrolled individuals a monthly premium until their eligibility is confirmed. The rule also targets gender-affirming care and would exclude “Dreamers” from marketplace coverage, though some of these changes have been temporarily halted by a federal court. The Justice Department has prosecuted schemes involving fraudulent ACA enrolment, leading to significant financial recoveries. Some analysts have cautioned that the proposed measures could make it harder for eligible individuals to enrol.
The expiration of enhanced subsidies is the result of a deadlock in Congress over extending the COVID-era tax credits. The issue is expected to be a significant factor in this year’s midterm elections, where economic concerns dominate many competitive races. Legislation passed in July — the “One Big Beautiful Bill Act” — includes provisions that Democrats argue will further undermine ACA subsidies and health coverage.
Despite the current turmoil, Cox expressed cautious optimism. Insurers appear to have anticipated the marketplace changes and have already made adjustments, which may mean that future health costs will not rise as sharply. Health insurers had sought steep premium increases for 2026 — a median proposed rise of 18% examined in rate filings from 312 payers — citing medical cost trends, rising labour costs, provider consolidation and demand for specialty drugs. Yet the actual average premium increase landed at 58% for consumers, reflecting the subsidy expiry. “I’m hopeful that this could be a one-time market correction and that we might not need to see such a high premium spike in the coming year,” Cox said.
