As Millions Leave ACA Plans, Remaining Enrollees Face Stark Cost Increases

Mike Smith, President Emeritus of The Brokerage Inc., contributes his insights to Insurance Advisor Magazine.

Enhanced federal subsidies tied to the Affordable Care Act (ACA) expired on January 1, 2026, and preliminary data from the Centers for Medicare and Medicaid Services (CMS) shows 1.2 million fewer Americans enrolled in coverage in 2026 compared to 2025. Unfortunately, as healthier enrollees drop their plans, insurance companies are left to cover a higher risk pool, driving up rates. Halfway through the year, we’re already seeing this spiraling dynamic at play. Here’s what you need to understand about current ACA marketplace conditions, and what they mean for enrollees and insurers.

Enhanced ACA subsidies expired on January 1, 2026. Preliminary CMS data shows 1.2 million fewer Americans enrolled this year than last — and we're only halfway through the plan year.

If you're an agent, you already felt that in your book. What you may not have fully priced in is the second-order effect: every reasonably healthy enrollee who walks doesn't just cost you a commission. It shifts the risk pool composition underneath the plans you're still selling, and it sets up next year's rate filings before this year's is finished.

The article breaks down why the subsidy cliff wasn't the whole story. Approved rate increases ranged from 4% to 26% depending on the carrier, landing at the same moment the enhanced credits disappeared. Most enrollees blame the premium. In reality, both variables contributed roughly equally to net costs that doubled in some cases — and understanding which lever is actually moving a client's number changes how you position the conversation.

There's a third variable most agents don't talk about openly. The flexible special enrollment periods introduced alongside the enhanced subsidies created an opening that some enrollees exploited: enroll when a costly procedure is coming, drop the plan the moment claims clear. Carriers paid out without ever collecting a full year of premium. That pressure didn't leave with the subsidies — the SEPs are still here — and the article explains the specific mechanisms insurers are now using to keep those enrollments stable through the end of the plan year without pushing people off coverage entirely.

Then there's the math on Q4 attrition, which is worth internalizing. Take an enrollee at a $1,000 monthly premium with $200 out of pocket and $800 in advance premium tax credits. When they drop coverage for November and December, that's a $2,000 hole for the carrier — and a predictable one, every single year, as rate notices land in October. Agents who see that cycle coming can get ahead of it. Agents who don't will spend December reacting.

The final section is where it gets useful: what two decades of watching this cycle actually teaches you about retention. Why 10–20% attrition is normal rather than alarming. How to spot a service area reduction coming in August or September. Why Georgia and Texas broke in opposite directions this year. And what proactive communication looks like when the goal isn't to save the plan — it's to save the client.