The Affordable Care Act (ACA) enrollment numbers are in free fall, and the implications are dire. The erosion of ACA enrollment portends higher insurance rates, as insurers are likely to raise rates again next year, following this year's larger-than-usual hikes. This is a critical component of the coverage landscape, and its political implications are far-reaching.
The initial results come amid rising public concern about affordability, with polls showing healthcare costs are often top of mind for voters. The average ACA plan deductible saw the steepest increase in history, growing by 37% or over $1,000, from $2,759 in 2025 to $3,786 in 2026 as enhanced premium tax credits expired. This is a political challenge for President Trump and the broader GOP, which has opposed enhanced subsidies to help people purchase Obamacare coverage.
The drop-off rate aligns with what some policy experts predicted, partly because Congress did not extend generous benefits that expired at the end of last year. Those enhanced subsidies had been in place since 2021. The individual market is trending toward a significant contraction in 2026, and may well resemble drops projected by the Congressional Budget Office.
The Wakely Consulting Group estimates that average ACA enrollment will end up being 17% to 26% lower this year than last. The failure to pay premiums varied by state, with those that enacted additional help having lower drop-off rates. States that run their own exchanges had higher payment rates than those served by the federal marketplace.
The biggest explanation for falling enrollment is cost. Some people had never experienced the ACA before the enhanced tax credits kicked in, so they faced extra sticker shock. In economic theory, no matter whether one is left, right, or center, it's a simple fact that when you raise prices of something, fewer people will buy it.
The expectation of a lower enrollment trend holding up is one of the key factors likely to translate into higher cost estimates as insurers draw up 2027 rates. The ongoing uncertainty and predicted decline in enrollment, which will vary by state and insurer, will play a role in setting next year's premium rates. It would not surprise me if there were some double-digit increases.
The Trump administration ended a special enrollment program that let low-income people enroll year-round. Some ACA critics say enrollment drops should not be seen solely in the context of rising costs. Paragon Health Institute, a free-market think tank that has become influential among conservatives on Capitol Hill, has long argued that record enrollment numbers in recent years were fueled by fraudulent sign-ups, perhaps in the millions.
Insurers, hospitals, and policy experts took issue with the methodology Paragon used to estimate improper enrollments, saying they likely were vastly overestimated. The biggest explanation for falling enrollment is cost. The long view of the situation is that the expectation of a lower enrollment trend holding up is one of the key factors likely to translate into higher cost estimates as insurers draw up 2027 rates.
