Enrollment in the Affordable Care Act is slipping, and experts warn the retreat could push insurance rates higher next year. After a record high in 2025, sign-ups were already down by about 1.2 million in January. That decline comes on top of unusually large premium increases this year — roughly a 26% average rise — and the end of enhanced federal premium tax credits that had been in place since 2021.
The immediate concern is how many of the roughly 23 million people who initially enrolled will actually pay their premiums. Early data and state reports point to sizable “drop-off” rates. Analyses of later-month state data show steep declines in some places — Georgia experienced about a 28% fall in effectuated enrollment in April compared with a year earlier. Reporting based on internal federal marketplace data suggested that roughly 21% of enrollees in the states using the federal platform failed to pay their January premiums, far above payment-failure rates a year earlier.
Consultants and actuaries say those payment shortfalls matter because they change the risk pool insurers expect to cover. Insurers set future premiums based partly on how many people remain enrolled and how sick or healthy that remaining group looks. If larger shares of younger and healthier people drop coverage because of “sticker shock,” the pool can get sicker on average and push premiums higher.
Several analyses point to a substantial contraction in the individual market this year. A Wakely Consulting Group review, drawing on data from 75 insurers, estimated average ACA enrollment could end 2026 between 17% and 26% below last year. Wakely also found that about 86% of enrollees made the January payment on average, with stronger payment rates in states that run their own marketplaces (about 92%) versus the federal platform (about 82–84%). States that used state funds to backfill lost federal subsidies or experienced smaller premium hikes saw lower drop-off rates.
Cost is widely seen as the principal driver. The expiration of enhanced tax credits led to much higher out-of-pocket premium costs for many people — in some cases more than doubling what they previously paid. Deductibles rose sharply as well: one analysis found average plan deductibles jumped about 37% from 2025 to 2026, increasing by more than $1,000 to an average near $3,800. Faced with higher monthly premiums and larger deductibles, many consumers shifted into lower-premium bronze plans that have much higher cost-sharing. Bronze plan uptake grew from about 30% to 40% of selections year over year (roughly 7.3 million to 9.2 million people).
Not everyone accepts cost as the only explanation. Some conservative analysts have argued that earlier record enrollments included substantial improper or fraudulent sign-ups and that part of the current drop reflects cleanup of those records. Insurers, hospitals and independent experts have questioned those fraud estimates as overstated, and most analysts still point to price increases and lost subsidies as the main reasons people are leaving coverage.
The timing and content of federal policy changes have added to insurer uncertainty. Key rules for 2027 marketplace plans were released late in the rate-setting season and included changes like allowing higher annual deductibles for some plan types and other regulatory shifts proposed by the administration. That late guidance makes actuarial work harder because insurers must model enrollment and utilization under new rules while limited data on 2026 payment behavior is still emerging.
Taken together — lower enrollment, higher premiums and deductibles, and regulatory uncertainty — the picture pushes insurers toward higher rate filings for 2027. Experts say a repeat of this year’s dramatic average increase is unlikely, but double-digit rate hikes are possible in many markets. How large increases become will vary widely by state and insurer, depending on local enrollment patterns, whether states provide backstop subsidies, and the health of the remaining risk pool.
For consumers, the immediate effects are real: people losing coverage or facing much higher costs, while hospitals and providers may also see more unpaid deductibles and copays. For policymakers, the trend presents a political and policy challenge — balancing budget choices, subsidy design and market stability as the nation watches whether the individual insurance market contracts further or steadies in the months ahead.