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ACA Marketplace Enrollment Declines as Subsidies Expire; Congressional Action Stalled

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ACA Enrollment Drops as Enhanced Subsidies Expire: What It Means for 2026

Enrollment in Affordable Care Act (ACA) marketplace health plans has declined by approximately 1.4 million people compared to the same period in the previous year, a drop attributed by analysts to the expiration of enhanced premium tax credits at the end of 2025. The open enrollment period for 2026 coverage is ongoing in most states until January 15. Congress has debated but not passed legislation to extend the subsidies, with differing proposals from Democrats and Republicans failing to secure the necessary votes.

Enrollment Decline

  • Total Enrollment: Federal data from the Centers for Medicare & Medicaid Services (CMS) shows approximately 22.8 million consumers selected an ACA plan as of January 12, down from 24.2 million at the same time last year.
  • New Enrollees: New customer sign-ups totaled 2.8 million, a decrease from 3.9 million in the prior year.
  • KFF Analysis: According to an analysis by KFF, enrollment is projected to fall from 22 million in 2025 to approximately 17 million in 2026, with up to 5 million individuals potentially dropping coverage.

"These numbers signal a significant shift in the market, with millions of Americans facing tougher choices about their healthcare."

State-Level Data

  • In Pennsylvania, the Pennie marketplace reported a 16% decrease in first-time sign-ups compared to the previous year.
  • In California, Covered California reported a 33% drop in new enrollments through December 6.

Subsidy Expiration and Premium Increases

  • Enhanced Tax Credits: The enhanced premium tax credits, enacted during the COVID-19 pandemic, expired at the end of 2025. These subsidies had reduced the percentage of household income required for premiums and eliminated the upper income limit for eligibility.
  • Premium Impact: Analysts report that without the enhanced credits, average premium costs approximately doubled from 2025 to 2026. KFF analysis estimated that individuals receiving financial assistance could see an average premium increase from $888 in 2025 to $1,904 in 2026.

"Households will pay a percentage of their income toward premiums, with the lowest-income brackets paying at least 2.1% of income and the highest earners paying nearly 10%."

  • Return to Pre-Pandemic Levels: If the enhanced subsidies expire permanently, ACA subsidies will revert to pre-pandemic levels. Individuals earning more than four times the federal poverty level ($62,600 for an individual; $84,600 for a couple) would no longer qualify for any subsidy.
  • Deductible Increases: KFF analysis notes that deductibles for remaining enrollees rose by an average of $1,000 in 2025.

Congressional Actions and Proposals

  • Senate Vote: On December 11, the Senate voted on two proposals. One proposal, supported by Democrats, sought to extend the enhanced subsidies as part of an agreement to end a government shutdown. A second, Republican-backed option included funding for health savings accounts (HSAs). Neither proposal received the 60 votes required for passage.

House Proposals

  • Speaker Mike Johnson has proposed a legislative package focused on "drivers of health care costs," including expanded access to association health plans, appropriations for cost-sharing reduction payments, and increased transparency for pharmacy benefit managers. This package does not include an extension of the enhanced ACA subsidies.
  • A House-passed Democratic-led bill proposed extending the enhanced premium tax credits by three years. A bipartisan discharge petition has been initiated to force a vote on this extension, potentially in January. The Congressional Budget Office estimated that a three-year extension would increase the national deficit by approximately $80.6 billion over a decade.

Party Positions

  • Democrats generally favor extending the enhanced subsidies.
  • Republican positions vary. Some oppose a direct extension due to cost and policy concerns, while others have expressed support for various proposals to extend tax subsidies. Senator Bill Cassidy has advocated for expanding high-deductible health plans (HDHPs) paired with HSAs, an approach described as "empowering the patient to lower the cost." Former President Donald Trump has also supported sending money directly to individuals for healthcare accounts.
  • White House Position: The White House has indicated general support for HSAs but has not publicly endorsed a specific congressional plan.

Consumer Behavior and Market Impact

Enrollment Patterns

  • Early enrollment data suggests a shift in consumer behavior. The number of returning customers selecting a plan increased to approximately 4.8 million, up from 4.4 million at the same time last year. Analysts suggest this may indicate that individuals with chronic conditions or immediate health needs are enrolling earlier. In California, officials noted an increase in consumers opting for bronze-level plans, which have lower premiums but higher deductibles.

Consumer Uncertainty

  • A KFF poll from December indicated that approximately half of current ACA enrollees who are registered to vote stated that a $1,000 increase in annual healthcare expenses would significantly influence their voting decisions. Some consumers have reported delaying enrollment decisions due to uncertainty about future costs.

"I'm waiting to see what happens in Congress before I choose a plan," one enrollee told pollsters.

Market Stability

  • Cynthia Cox, director of KFF's Program on the ACA, stated she does not see a current risk of a "death spiral" in the market, noting that enough people are still buying coverage. However, some insurers, including Cigna, have announced they will not participate in ACA markets in 2027. Analysts note that individuals dropping coverage tend to be healthier, which could lead to an adverse risk pool and further premium increases.

Coverage Options for 2026

  • Bronze and Catastrophic Plans: For those remaining in the ACA marketplace, Bronze and Catastrophic plans typically offer the lowest premiums. Bronze plans carry higher annual deductibles, averaging nearly $7,500 nationally. Eligibility for Catastrophic plans has been expanded for 2026 to include individuals losing subsidies.
  • Short-Term Plans: Short-term insurance plans are available outside the ACA marketplaces. These plans are generally less expensive but are not ACA-compliant, do not cover all essential health benefits, and can impose annual or lifetime benefit caps. Insurers can exclude coverage for pre-existing conditions. These plans are available in 36 states; some states prohibit or restrict them.
  • Non-Comprehensive Options: Other options include indemnity plans, which pay fixed dollar amounts towards deductibles, and faith-based health sharing plans, which pool member funds but are not required to guarantee payment of expenses. These plans operate outside ACA regulations.

Nevada Public Option

  • Enrollment: Nevada's new public-option health plans, "Battle Born State Plans," enrolled over 10,000 people in their first year. This is less than a third of the 35,000 enrollments initially projected by state officials.
  • Federal Policy Impact: Researchers indicate that state-level public options may struggle to offset gaps created by the expiration of federal enhanced tax credits. The credits provided an average of $465 in monthly savings in Nevada.
  • Design: The plans are private-public partnerships. State law mandates carriers to reduce premium costs by 15% over four years compared to benchmark silver plans. A lawsuit challenging the law on constitutional grounds was dismissed by a state judge and is currently under appeal.