5 million fewer may keep ACA coverage as subsidies lapse

5 million – A new KFF analysis projects a sharp drop in Affordable Care Act marketplace enrollment this year and warns that many people who leave coverage are likely to become uninsured. The report points to the expiration of enhanced premium tax credits at the end of las

When people went to the ACA marketplaces to buy health insurance. many counted on a bridge that was scheduled to end. That bridge—enhanced premium tax credits—expired at the end of last year. Now. a KFF analysis is putting a number to what happens next: as many as 5 million people who buy health insurance on the Affordable Care Act marketplaces may drop their coverage this year.

The scale of the expected pullback is larger than the initial enrollment numbers suggested. KFF notes that about one million fewer people signed up for a plan this year compared to the year before. but insurers. administrators. and other health policy experts had warned that the situation would likely worsen as time passed—once people realized they couldn’t afford to keep their plans.

Cynthia Cox, a co-author of the analysis and director of KFF’s Program on the ACA, described the change in plain terms: “Costs went up significantly and a lot of people dropped their plans.”

KFF’s report draws on a range of data. including Centers for Medicare & Medicaid Services and state-based marketplace information. KFF survey data. and estimates from Wakely Consulting Group. While the analysis stresses that some information remains preliminary. it projects a steep drop in enrollment from 22 million in 2025 to about 17 million in 2026.

That estimate aligns with CMS internal data as reported last week, according to KFF’s analysis.

For the people who leave the marketplaces, the consequences may not stay within the insurance system. Cox said the 5 million people dropping out likely didn’t find a seamless alternative: “Those who stayed [in the marketplaces] are paying more. either in the form of higher premiums or higher deductibles or both. ” she said. And for those who left, Cox suggested most probably became uninsured. “The 5 million people dropping out of the markets could have bought health coverage elsewhere. but Cox says most probably became uninsured.”.

As the marketplace shrinks, those who remain face a harsher math. Cox pointed to a pattern that helps explain why the enrollment decline has the shape it does. Last fall, KFF projected that premiums were doubling on average. “What ended up happening is that a lot of people who had the steepest increases dropped coverage,” she explained. “Also, a lot of people moved on to a lower level of coverage that has a much higher deductible.”.

The overall bottom line, Cox said, is that “pretty much everyone with an ACA plan is paying more.”

That increase doesn’t show up only in monthly bills. The KFF report found that deductibles rose last year more than they ever had before, by an average of $1,000.

Cox’s concern is that the extra cost doesn’t just change budgets—it changes what happens when health problems arrive. “If you’re uninsured. you’re going to face higher costs if you need to go to the doctor. ” she said. “You’re also at risk of financial catastrophe if you face a major accident or serious diagnosis.”.

Even those who keep coverage may still find themselves squeezed. Cox warned that families could end up paying more to stay insured and still struggle to use their coverage. “If you are paying a higher premium to keep your coverage again. you still might not have as much money to be able to afford to go to the doctor. ” she said. “And if you move into a high deductible plan. then that means that you might have to pay out a lot more money before your coverage kicks in.”.

There is one potential bright spot in the picture, Cox said. KFF’s analysis suggests insurers may have done a relatively good job forecasting the year’s churn—who would drop coverage and how the market would respond. That raises the possibility that this could be a one-year shock tied to the expiration of the extra premium subsidies.

“It might mean that we don’t see a lot of insurers needing to do another big market correction,” Cox said.

But the next step is now in insurers’ hands. As they file their rates for next year. Cox said the country will soon learn whether costs are poised to rise again—or whether the market has already absorbed the biggest change and families will face something closer to a stable baseline. “She says it’ll become clear soon. as insurance companies file their rates for next year. whether costs are going to go up again next year. or — best case — this is the new normal.”.

KFF Affordable Care Act ACA marketplaces enrollment drop premium tax credits enhanced premium subsidies expiration deductibles uninsured CMS Wakely Consulting Group