Affordable Care Act Coverage Crisis Worsens — 5 Million Americans Expected to Drop Insurance

Around 5 million Americans who buy health insurance on Affordable Care Act (ACA) marketplaces could drop their coverage this year amid considerably higher premiums after the enhanced premium tax credits for health plans bought on the ACA marketplaces expired at the end of 2025, according to health research organization KFF.

Congress came close to a deal to extend the additional federal money that helped keep premiums low, but the deal fell through.

KFF estimated that marketplace enrolment could decline 21.5% to 17.5 million people in 2026 from 22.3 million people a year earlier. 'Costs went up significantly and a lot of people dropped their plans,' said KFF's Cynthia Cox.

The organization had earlier estimated the average ACA premiums would jump by 114% after the lapse of subsidies, which were first enacted in 2021 during the Biden administration. In reality, premiums surged by 58% to $178 per month from $113 per month, which is lower than expected earlier, but still a massive surge.

ACA Subsidies Were a Boon for Millions of People

Insurance plans on the ACA marketplace were utilised by all sections of the society, including the self-employed, gig workers, and even early retirees. American households have described health costs as a top financial challenge.

Amid higher costs, around 9.2 million people signed up for bronze plans in 2026, up from 7.3 million a year earlier. These plans cost less upfront but result in higher out-of-pocket costs if households use their insurance for claims. The shift to lower-cost plans could be explained by the rise in average deductible for households across ACA health plans by 37% to $3,786 in 2026 from $2,759 in 2025. KFF believes this is 'the steepest increase in history.'

The 5 million people dropping out of the markets could have bought health coverage elsewhere, but Cox said they most probably became uninsured.

'Those who stayed [in the marketplaces] are paying more, either in the form of higher premiums or higher deductibles or both,' Cox had mentioned. 'What ended up happening is that a lot of people who had the steepest increases dropped coverage. Also, a lot of people moved on to a lower level of coverage that has a much higher deductible.'

She added that staying uninsured attracts higher costs during doctor visits. At the same time, higher premiums could leave you in a position where you might not have money to afford to go to the doctor.

However, Cox believes there is a bit of positivity as well. She thinks that insurance firms did a good job of forecasting what would happen this year related to insurance coverage and market dynamics. It could be possible that price hike is a 'one-year shock'.

'It might mean that we don't see a lot of insurers needing to do another big market correction,' she said, adding that it will become clear soon if costs are going higher next year.

Policy experts also believe the ACA subsidies could become a topic posing threats to Republicans during a midterm election year, given that affordability remains a central theme.

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