Why ACA Premiums Jumped and 3 Million People Dropped Coverage

Enhanced ACA subsidies expired on January 1st. Premiums spiked, three million people left, and insurers want another double-digit raise for 2027.

• Why three million people dropped coverage.

• What the 2027 rate requests mean for you.

• The one state that reversed the trend.

Why three million people dropped coverage.

About three million fewer people are paying for Affordable Care Act coverage than a year ago. Enrollment fell from roughly 22 million to 19 million by February, the first marketplace decline since 2017, and federal data released in June confirmed it across all 50 states. The government points to a crackdown on improper sign-ups. Independent analysts point to the price.

The price change wasn’t subtle. For five years, enhanced tax credits capped what people paid for a marketplace plan, and more than 90% of enrollees got them. Those credits expired on January 1st. The average monthly payment jumped 58%, and deductibles rose about a thousand dollars.

The credits were the central fight in last fall’s 43-day government shutdown, the longest in U.S. history. It ended in November, when lawmakers agreed to reopen the government in exchange for a promised vote on extending them. The credits expired at the end of December. A House vote in January passed the extension, but the Senate didn’t take it up.

Some of the enrollment drop may be due to improper sign-ups being removed. But the federal data can’t cleanly separate cleanup from cost, and the timing is hard to set aside: the coverage cliff arrived the same month the subsidy did. When a premium doubles, a lot of people are going to cancel.

What the 2027 rate requests mean for you.

For 2027, insurers are asking to raise rates again, a second year running. KFF’s analysis for The Wall Street Journal puts the typical request near 14%. In Washington state, the largest marketplace insurer wants 28%, on top of a 35% jump this year. The companies blame rising costs and a shrinking, sicker customer pool, what analysts call a “death spiral”: as healthier people leave over price, the ones who stay cost more, so rates rise, so more people leave.

There’s a second mechanism, less visible. A new verification rule can suspend a person’s tax credit when the details on their application don’t match a government database. Fixing the mismatch can take months, and during that time the enrollee owes the full premium.

The credits were written to be temporary, which means coverage for tens of millions of people was set to expire on a schedule, left to whichever party held Congress in a given year. The verification rule was added on purpose. The death spiral is the predictable output of letting the subsidy lapse.

The one state that reversed the trend.

Which is also why the fix isn’t “shop smarter.” No family re-prices a 58% hike by clipping coupons, and the polling shows they know it: two-thirds of the public, including most independents, say Congress got this wrong. The lever sits with Congress and the states. A Senate proposal from Susan Collins (R-ME) and Bernie Moreno (R-OH) would restore the credits for two years, and it’s drawn interest from both sides of the aisle. What’s blocking it is an unrelated fight over abortion-funding language.

And there’s a working proof of concept. New Mexico was the only state to fully replace the lost federal subsidies with its own money, and the only state where enrollment rose, about 14% in the federal data, while it fell in nearly every other state.

This is the part that gets lost when the story is told as a budget line. The need for a mammogram or an insulin refill or a blood-pressure check doesn’t expire with the tax credit. When people drop coverage, they don’t stop getting sick. They skip the screening, delay the visit, and show up later and sicker, which costs more and helps no one. Even among people who kept their plans, 73% told KFF they were worried about affording a hospital stay.

Open enrollment for next year starts this fall. The credits are still expired, the 2027 requests are still climbing, and the vote that would change either one hasn’t happened. Whether the number of insured Americans keeps falling is a choice, and only a few hundred people in Washington get to make it.