As many as 5 million people who buy health insurance on the Affordable Care Act marketplaces may drop their coverage this year, according to a new analysis from KFF, the nonpartisan health research organization.
That's many more than the initial enrollment statistics indicated. About one million fewer people signed up for a plan this year compared to the year before, but insurers, administrators, and other health policy experts warned that the picture would likely get worse as time went on and people found they could not afford to keep their plans.
A major reason for the sharp drop in enrollment is that enhanced premium tax credits for these health plans expired at the end of last year. Congress came close to a compromise to extend the extra federal money that helped keep premiums down, but the deal fell apart.
"Costs went up significantly and a lot of people dropped their plans," says Cynthia Cox, a co-author of the analysis and director of KFF's Program on the ACA.
The report analyzed a range of data, from the Centers for Medicare & Medicaid Services and state-based marketplaces, along with KFF survey data and estimates from Wakely Consulting Group.
Although much of the information is still preliminary, the analysis projects that enrollment in these marketplaces will plunge this year, from 22 million in 2025 to about 17 million in 2026. This is similar to CMS's internal data as reported by NOTUS last week, the KFF analysis notes.
The 5 million people dropping out of the markets could have bought health coverage elsewhere, but Cox says most probably became uninsured.
"Those who stayed [in the marketplaces] are paying more, either in the form of higher premiums or higher deductibles or both," she says.
Last fall, KFF projected that premiums were doubling on average. "What ended up happening is that a lot of people who had the steepest increases dropped coverage," she explains. "Also, a lot of people moved on to a lower level of coverage that has a much higher deductible."
The bottom line is that pretty much everyone with an ACA plan is paying more.
"If you're uninsured, you're going to face higher costs if you need to go to the doctor," Cox says. You're also at risk of financial catastrophe if you face a major accident or serious diagnosis.
"If you are paying a higher premium to keep your coverage again, you still might not have as much money to be able to afford to go to the doctor," she says. "And if you move into a high deductible plan, then that means that you might have to pay out a lot more money before your coverage kicks in."
The new report found deductibles rose last year more than they ever had before, by an average of $1,000.
There is a bit of a positive note, Cox says. It seems like insurance companies did a pretty good job of predicting what would happen this year in terms of who would drop coverage and how that would affect the market. So it's possible this is a one-year shock, after the extra premium subsidies expired. "It might mean that we don't see a lot of insurers needing to do another big market correction," she explains.
She says it'll become clear soon, as insurance companies file their rates for next year, whether costs are going to go up again next year, or — best case — this is the new normal.
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