Fewer Americans have selected Affordable Care Act health insurance plans this year as expiring enhanced tax credits and other factors push health expenses beyond what some people say they can manage, according to new federal data.
The Centers for Medicare and Medicaid Services reported Monday that, nationally, around 800,000 fewer people have selected ACA plans compared with a similar point last year—an overall 3.5% drop in total enrollment so far. The CMS said the new data is only a snapshot and reflects a pool of enrollees that changes continuously.
The CMS data includes sign-ups through Jan. 3 in states that use Healthcare.gov for ACA plans and through Dec. 27 in states that run their own ACA marketplaces. The shopping window still extends beyond those cutoffs in most states: the period continues through Jan. 15 for plans that start in February.
Even though enrollment is still early in the shopping period, the federal snapshot builds on concerns that expiring enhanced tax credits could cause enrollment to fall and force some people to make difficult choices. Experts warned that the number of people who have signed up for plans may drop further as enrollees receive their first bills in January and some decide to cancel.
The enrollment slide arrives amid Congress’s ongoing partisan fight over the subsidies that expired at the start of the year. Democrats have pushed for a straight extension of the tax credits, while Republicans have argued for larger reforms focused on fraud and abuse and on keeping costs down overall.
Last week, the House passed legislation to extend the subsidies for three years, and the measure is now before the Senate, where pressure is building for what AP described as a bipartisan compromise.
The ACA has been an increasingly popular option for people without health coverage through their jobs, including small business owners, gig workers, farmers and ranchers, AP reported. For the 2021 plan year, about 12 million people selected an ACA plan; enhanced tax credits were introduced the following year and, four years later, enrollment had doubled to over 24 million. This year’s sign-ups—about 22.8 million so far—mark the first time in the past four years that enrollment has been down from the previous year at this point in the shopping window.
KFF, a health care research nonprofit, said the loss of the enhanced subsidies means annual premium costs will more than double for the average ACA enrollee who had them. The Congressional Budget Office estimated that extending the subsidies for three years would increase the nation’s deficit by about $80.6 billion over the decade.
Health economist Robert Kaestner of the University of Chicago said some people who drop ACA coverage may still have other options, including switching to a partner’s employer health plan or changing their income to qualify for Medicaid. Kaestner said his expectation is that the drop in ACA coverage will affect uninsured rates for a time.
“My prediction is 2 million more people will lack health insurance for a while,” Kaestner said. He added that Republicans would argue the approach uses government money more efficiently, targets people who really need it, and saves $35 billion a year.
Several Americans interviewed by AP said they plan to forgo ACA coverage for 2026 and pay out of pocket for needed appointments. Many described hoping to avoid costly injuries or diagnoses before coverage alternatives can be arranged.
“I’m pretty much going to be going without health insurance unless they do something,” said 52-year-old Felicia Persaud, a Florida entrepreneur, who said she dropped coverage after seeing her monthly ACA costs were set to increase by about $200 per month. She compared the decision to gambling: “It’s sort of like playing poker and hoping the chips fall and try the best that you can.”