Millions drop Obamacare coverage after subsidies expire, costs rise

June 27, 2026 - 22:24

New data from the federal government reveals a sharp decline in Affordable Care Act enrollment. About 3 million fewer people were covered by ACA health plans this February compared to the same month last year. The drop comes after enhanced subsidies that made insurance more affordable for many Americans officially expired at the end of 2024.

Without those extra tax credits, monthly premiums jumped significantly for millions of enrollees. Many low- and middle-income households who had been paying as little as $10 a month suddenly faced bills of $100 or more. For others, the cost increase was even steeper. Consumer advocates say the price shock forced a large number of people to simply walk away from coverage they could no longer afford.

The enrollment numbers, released by the Centers for Medicare and Medicaid Services, show a total of roughly 21 million people had signed up for 2025 plans during the open enrollment period. But by February, that number had fallen to about 18 million. The gap represents people who either dropped their plans after the first payment was due or who never made the initial payment.

The enhanced subsidies were originally passed as part of the Biden administration's pandemic relief efforts and later extended through the Inflation Reduction Act. They capped insurance premiums at 8.5% of a household's income for many buyers. When Congress let the provision lapse, the cap reverted to a higher percentage, making coverage unaffordable for a broad swath of the population.

Some states have stepped in with their own subsidy programs to soften the blow, but most have not. The result is the largest single-year drop in ACA enrollment since the law's early days. Insurance industry analysts warn that if the trend continues, the risk pool could become smaller and sicker, potentially driving premiums even higher for those who remain.