Dive Brief:
- The Affordable Care Act exchanges will continue shrinking throughout 2026 as more beneficiaries elect not to pay higher premiums, according to a new analysis. It’s a clearer picture of how policy turbulence has affected the exchanges, which is integral for insurers — and their investors — as plans try to improve ACA margins after being hit with higher costs last year.
- Fourteen percent of ACA enrollees didn’t pay premiums in January, after facing sticker shock from the loss of more generous subsidies for plans, according to the report from Wakely Consulting Group.
- Enrollees who don’t pay premiums are eventually removed from coverage. As a result, the ACA exchanges could shrink by 17% to 26% this year, the consultancy estimated, while seeing poorer health in the people who remain.
Dive Insight:
Wakely’s data is the clearest signal to date on just how drastically the ACA exchanges could contract this year due to the expiration of COVID-era enhanced tax credits. The subsidies, which expanded financial assistance for middle- and low-income enrollees, lapsed at the end of last year after a fierce but ultimately fruitless battle in Congress over whether or not to extend them.
As a result of the subsidy loss, premiums more than doubled on average for subsidized enrollees in 2026 — the largest net premium increase since the initial implementation of the ACA, according to Wakely. Health policy experts said that millions of Americans would be priced out of the exchanges, and that ACA enrollment could fall by more than 30% this year.
In light of the dire predictions, market watchers were surprised when the CMS announced that total ACA enrollment fell by just 5%, or about one million people, compared to 2025.
But those numbers don’t show real or “effectuated” enrollment, reflecting how many beneficiaries actually pay premiums and have their coverage kick in.
Experts say that attrition from people not paying their premiums could be particularly high this year, given individuals that automatically reenrolled in coverage might not pay their premium or choose to disenroll after seeing steep bills from their insurance carriers.
Wakely’s analysis estimates that ACA enrollment could drop by 17% to 26% this year, based on more ACA enrollees than usual failing to pay their premiums in January. The forecast is still lower than the upwards of 30% decline some experts originally predicted.
But it’s well above the 5% dip held up by the Trump administration as proof of the ACA exchange’s stability, despite GOP actions to remove financial assistance for lower income enrollees.
And some states could see enrollment losses higher than 26%, due to variations in premium payment patterns, Wakely said.
For example, states with lower automatic reenrollment rates and lower premium increases had more ACA enrollees pay their premiums in January.
States that operated their own ACA exchanges, instead of using the federal marketplace, also had higher rates of premium payment, likely due to efforts from states to provide premium assistance and other help, according to the analysis.
Wakely’s analysis, which is based on data from 80% of the entire ACA market, aligns with predictions from major ACA insurers of how dramatically enrollment could shrink this year. But given how early it is in the year, there’s still uncertainty around whether insurers priced their plans highly enough to account for enrollment changes.
Facing higher costs, younger and healthier individuals are more likely to drop coverage, leaving payers with a sicker population that’s more expensive to insure. According to Wakely, people who made premium payments in January had, on aggregate, 10% higher morbidity — a measure of a population’s sickness — than people who didn’t.
As a result of healthier individuals exiting the market, overall ACA morbidity could increase between 2.9% and 6.5% in 2026, the analysis estimates.
Where market enrollment and morbidity eventually land have major repercussions on U.S. insurers, especially those with significant exposure to the exchanges like Centene, the largest provider of ACA plans.
It’ll be difficult to tell if premium hikes will cover rising morbidity until the market gets more data about claims and utilization this summer — especially given how uncommon it is for health insurance marketplaces to expand or contract to this extent, J.P. Morgan analyst John Stansel commented in a note on the Wakely data.
"These findings highlight a level of uncertainty that issuers and policymakers will need to carefully navigate,” Michael Cohen, co-author of the Wakely report, said in a statement.
If insurers failed to adequately prepare for enrollment and spending changes this year, payers could jack up premiums even higher and more companies could exit the exchanges in 2027. That would winnow options and put more financial stress on the millions of Americans who rely on the ACA for coverage.
