Nearly 5 million fewer Americans are expected to enroll in Affordable Care Act (ACA) health insurance plans this year, according to a new analysis from the healthcare research nonprofit KFF, representing a decline of more than 20% from 2025. The analysis projects that nationwide enrollment will fall to approximately 17.5 million in 2026, down from 22.3 million last year. The drop is steeper than initial federal data had indicated, with the Centers for Medicare and Medicaid Services (CMS) reporting what KFF described as the sharpest single-year decline since the ACA marketplaces launched.
Multiple factors are driving the exodus. The expiration of enhanced federal subsidies on 1 January 2026 — subsidies that were introduced under the American Rescue Plan and later extended by the Inflation Reduction Act — has removed a vital financial lifeline for millions of enrollees. Many individuals who had been automatically renewed into plans from the previous year found those plans had become far more expensive without the subsidies, leading them to drop coverage when they could no longer afford the monthly premiums. KFF noted that while one million people chose not to re-enrol during the 2026 open enrolment period, an additional up to four million more could lose coverage over the course of the year due to unpaid premiums.
The Trump administration has asserted that federal efforts to combat fraud within the ACA programme are largely responsible for the enrollment decline. Complaints about unauthorised enrollment rose significantly in 2025, and CMS has restarted enforcement actions aimed at identifying and removing improper enrollments. Some analysts have argued that stricter verification requirements could make it harder for eligible individuals to sign up. The administration has also claimed its planned legislation would clamp down on fraud and save families money. CMS, whose final 2026 enrollment data has not yet been published, did not immediately respond to a request for comment on the KFF analysis.
Enrollment declines have been observed across most states, but the impact is uneven. North Carolina saw the largest percentage decrease, at 22%. States that operate their own exchanges have retained a larger proportion of enrollees compared with those relying on the federal marketplace. New Mexico, however, has recorded an increase in enrollment, driven by state-funded subsidies that fully offset the loss of federal tax credits. The Congressional Budget Office (CBO) had previously projected average monthly ACA marketplace enrollment of 16.9 million for 2026 — a figure broadly consistent with the KFF estimate.
Costs rise sharply for those who remain covered
For enrollees who have managed to hold onto their coverage, the financial burden has increased substantially. The average monthly premium payment has risen by 58%, from $113 in 2025 to $178 in 2026, according to the KFF analysis, which drew on data from the actuarial firm Wakely Consulting Group. Meanwhile, the average enrollee’s deductible has grown by 37% — an increase of more than $1,000 per person — reaching a record high of $3,786. 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 increase in premiums, while steep, was lower than KFF’s earlier projection of 114% if individuals had stayed in the same plans. The difference is largely the result of enrollees downgrading to cheaper plans with higher deductibles. The share of people selecting bronze-level plans — which carry lower monthly premiums but higher out-of-pocket costs — rose from 30% in 2025 to 40% in 2026. Some individuals have opted for what KFF described as “bare-bones” plans with very high deductibles in order to maintain some form of coverage. Cox explained: “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.”
KFF had previously warned that if the enhanced subsidies expired, premium payments would more than double in 2026. The actual 58% jump was moderated by plan switching and people exiting the market altogether. Cox noted that insurers appear to have anticipated many of the marketplace changes now unfolding and have already made adjustments. She expressed cautious optimism that the current spike might represent a one-time market correction, adding: “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.”
Middle-income earners disproportionately hit by the ‘subsidy cliff’
The expiration of the enhanced subsidies has created a so-called “subsidy cliff” that disproportionately affects middle-income Americans. Individuals earning just above 400% of the federal poverty level no longer qualify for any premium tax credits under the ACA. Although this group made up only 3% of plan selections in 2025, it accounted for 27% of the drop in sign-ups for 2026. Overall, consumers with incomes above the subsidy cliff represented nearly half — 48% — of the decline in plan selections from 2025 to 2026.
Middle-income Americans tend to earn too much to qualify for the remaining subsidies, which are reserved for low-income enrollees, but not enough to comfortably afford full-price health coverage. Many rely on ACA plans because they do not have access to employer-sponsored insurance — including gig workers, farmers, ranchers and hairstylists. Older adults, particularly those near retirement age, also face significant affordability challenges. The rising costs and enrollment declines are expected to feature prominently in this year’s midterm elections, with economic concerns at the forefront of many competitive races.