Millions Lose ACA Health Plans in Early 2026 Following Subsidy Expiration, New Analyses Confirm

WASHINGTON — As many as 5 million Americans who buy health insurance through the Affordable Care Act marketplaces are projected to lose their coverage this year, according to a new analysis from KFF, a nonpartisan health research organization. The steep drop, confirmed by multiple data sources released in May and June 2026, follows the expiration of enhanced federal premium tax credits at the end of 2025, which has caused insurance costs to skyrocket for individuals and families.

The trend of declining coverage began with lower-than-expected sign-ups during the open enrollment period, but new reports indicate the problem is worsening as enrolled individuals fail to make their monthly premium payments. An analysis by Georgetown University released in early June, which examined state-level data through April, found that coverage losses in several states were even more severe than initially anticipated, signaling a growing crisis for those who rely on the individual market for health insurance.

For small and mid-sized business owners, this is far more than a distant policy debate; it's a direct operational threat. Many smaller companies cannot offer group health plans, meaning their employees depend entirely on the ACA marketplace. When these employees face premium hikes of 50% or more, it introduces profound financial instability into their lives, which inevitably spills into the workplace through stress, absenteeism, and turnover. In our experience, workforce stability is a critical asset, and its erosion due to external factors like this healthcare cost crisis constitutes a major business risk. We advise clients that anticipating and planning for these kinds of shocks is a fundamental component of effective financial risk management. Helping key employees navigate their options or structuring compensation to account for these new costs can be essential for retention. C&S Finance Group LLC works with businesses to build this kind of operational and financial resilience; you can learn more at csfinancegroup.com.

The primary driver of the coverage decline is the end of the enhanced subsidies first enacted as part of the American Rescue Plan Act. These subsidies capped what households paid for premiums as a percentage of their income, making coverage affordable for millions. With their expiration on December 31, 2025, after Congress failed to reach a deal on an extension, the sticker shock was immediate. According to an analysis from healthinsurance.org, if all marketplace enrollees had renewed their 2025 plans, their average net premiums would have increased by a staggering 114%.

This potential increase forced many consumers to either downgrade to less comprehensive plans or drop their coverage entirely. The result was that average net premiums still increased by a substantial 58% for those who maintained coverage. “Costs went up significantly and a lot of people dropped their plans,” said Cynthia Cox, a director at KFF and co-author of its May 2026 analysis.

The phenomenon has been described as a “drip, drip, drip” of declining coverage. While initial open enrollment numbers showed about one million fewer sign-ups than the previous year, the real story is unfolding in the months since. An analysis by Wakely Consulting Group, which covered about 80% of the individual market, found that only 86% of people who selected a plan for 2026 actually paid their first premium in January to effectuate the coverage. The remaining 14% either never gained coverage or entered a three-month grace period for non-payment.

Overall, the Wakely analysis projects that average enrollment in the individual market could shrink by between 17% and 26% in 2026 compared to the 2025 average. This gradual but steady decline is happening as households who initially managed the first payment find they cannot sustain the higher monthly costs.

Recent state-level data reinforces these projections. According to the Georgetown University analysis published June 10, monthly enrollment data through April from Arkansas, Colorado, Maryland, Massachusetts, New Mexico, and New York showed a significant number of people canceling their plans or being terminated for non-payment after the open enrollment period concluded.

The financial pressure on consumers is palpable. Data from healthinsurance.org shows that in early 2026, search interest for the term “cost of health insurance” more than doubled compared to the same period in 2025. Similarly, searches for “health care subsidy” nearly tripled, indicating widespread consumer anxiety and a desperate search for financial relief that is no longer available at the federal level.

Attention now turns to the Centers for Medicare & Medicaid Services (CMS), which is expected to release the first official nationwide data on effectuated enrollment for early 2026 by mid-year. While this report will provide a clearer national picture, it will not capture the full scope of losses, as it will not reflect policies that lapsed at the end of March when grace periods expired for those who missed January payments. The full impact may not be known until later in the year as the financial strain of higher premiums continues to push more individuals and families out of the insurance market.