5 Million Americans Drop ACA Health Insurance After Subsidy Expiration Doubles Premiums

The US individual health insurance market is contracting sharply, according to new data published by the Department of Health and Human Services on June 26, 2026. Enrollment in Affordable Care Act (ACA) marketplace plans has fallen by 5 million people compared with the record high reached the prior year — a decline that health policy experts had widely anticipated as the consequence of expiring federal subsidies.

The primary driver is cost. Average premium costs roughly doubled from 2025 to 2026 after enhanced premium tax credits, which had made marketplace coverage substantially more affordable, were allowed to expire. The expiration followed a political standoff in which Democrats shut down the government in October 2025 in an unsuccessful attempt to negotiate an extension of the credits. The enrollment decline breaks down into two components: more than 1 million fewer people actively selected a plan for 2026, while an additional roughly 4 million either disenrolled or failed to pay their premiums and consequently lost coverage.

Health policy researchers say the data points clearly to affordability — not fraud — as the dominant cause. Cynthia Cox of KFF and Stacey Pogue of the Georgetown Center on Health Insurance Reforms both noted that while fraud exists in all insurance markets, the evidence does not support attributing a 5 million-person drop to fraud allegations; rather, people are making decisions based on what they can afford to pay each month.

The contraction also poses challenges for insurers. Several carriers, including Cigna, have announced they will not participate in ACA markets next year — a smaller, less-profitable market becomes less attractive to insurers. A particular concern is that the people dropping coverage tend to be healthier, raising the theoretical risk of a 'death spiral' in which markets become dominated by sicker, costlier enrollees. KFF's Cox said she is not currently worried about a death spiral, noting that enough people are still buying coverage to keep markets functioning, and no region currently faces having zero participating insurers. However, early 2027 rate filings analyzed by Georgetown indicate that premiums are set to rise again next year, suggesting enrollment may continue to shrink.