Marketplace Enrollment is Not Fine
Emerging data shows that health insurance Marketplaces signups are down. The story on affordability is even worse and will drive more disenrollments in the coming months.
Authors: Ellen Montz and Tara Straw
Editors: Patti Boozang and Amanda Eisenberg
tl;dr
With the open enrollment period (OEP) for federally facilitated Marketplace (FFM) and many state-based Marketplaces (SBMs) having ended on Jan. 15, the health care system is bracing for an enrollment drop for the first time since 2020.
Some analysts say that Marketplace enrollment is fine. They point to the lack of an immediate catastrophic enrollment drop as an indication that the expiration of the enhanced premium tax credits (ePTC) has a limited impact on Marketplace enrollees. But this view ignores the affordability trouble lurking underneath those numbers.
People are paying more for less coverage with the expiration of the ePTC. Many are compensating for less buying power by choosing lower-premium, higher-deductible plans, which come with greater out-of-pocket costs and increased financial risk when people get sick.
The real enrollment results won’t be seen for months when data is available for how many enrollees paid their first premium to initiate their coverage, with more attrition expected throughout the year as enrollees’ monthly budgets run dry.
While a number of states have stepped up to the plate using state dollars to bring down premiums, these contributions aren’t sustainable in a tough state fiscal environment.
The 80 Million Impact
This week, states and other stakeholders are reeling from a growing and alarming pattern of Trump administration actions to cut off federal funding to state health and human service programs (some of which get reversed, some not.) More on that soon. In the meantime, we turn our attention to the emerging data on open enrollment in the Affordable Care Act (ACA) Marketplaces and what it means for affordable health coverage and access for the millions of Americans who get their health insurance through the Marketplaces. Spoiler alert: It’s not good and mirrors the broader economic pressures that families are facing across the nation. The failure to extend critical ePTC leaves Marketplace consumers paying more for less coverage or even unable to afford coverage at all, and so more are opting out.
Marketplace Enrollment is Declining
In the waning hours of OEP, the data signals the Marketplaces will see their first enrollment decline since 2020, after a period of record premium affordability and a more than doubling of enrollment between 2021 and 2025. Estimates showed that coming into this year’s OEP, enrollees would need to pay double their current premium just to keep their same plan. Early data prove the impact of these significant increases. Figures released by the Centers for Medicare & Medicaid Services (CMS) a week prior to the close of OEP shows nearly 1 million fewer people enrolling in coverage compared to the same period last year. This nationwide figure is driven by decreases in FFM enrollment, which has fallen by nearly 1.2 million, but some SBMs have seen declines as well. Officials in Idaho, Massachusetts, and Virginia reported that twice as many people dropped their coverage altogether for 2026 compared with the same point last year. Pennsylvania’s disenrollments have tripled, with more than 1,000 new disenrollments a day. A few SBMs have maintained their enrollment, likely due to their activation of temporary state-based subsidies to blunt the impact of the ePTC ending.
People are Paying More for Less Coverage
The loss of ePTC at the end of 2025 has increased Marketplace premiums by 114%, on average, for 2026. Among the hardest hit are older people with income over 400% of the federal poverty line (FPL), who lost subsidies entirely despite often experiencing five-figure annual premium costs.
Millions of consumers are enrolling despite significantly higher premiums, but survey data and evidence from SBMs indicate that consumers are mitigating these higher costs by shopping for lower-premium plans, often by switching to a lower “metal tier” — leaving them exposed to higher total costs throughout the year. Though premiums may be lower on the surface in the cheaper metal tier, this shopping decision has consequences that aren’t always obvious to the consumer — namely, thousands of dollars more in higher deductibles and other out-of-pocket costs, even when enrolling in an otherwise identical plan.
Let us explain. Marketplace plans are arrayed across four metal tiers: Bronze, Silver, Gold, and Platinum. The plans all cover the same services but differ based on how the consumer and the insurer split the bill for health care services. Gold comes with a high premium and low out-of-pocket costs (i.e., you pay more upfront but have less to pay when you use services.) On the other end of the spectrum, Bronze plans are lower premium but have high out-of-pocket costs when you use care (i.e., you pay less upfront, but the more health care you use, the more you pay.)
People moving from a Gold plan to Bronze during this open enrollment will see their deductibles increase by about $5,800 annually. The impact is even worse for consumers with incomes below 250% of the FPL (about $39,100 for a single person or $66,600 for a family of three) who switch from Silver to Bronze plans and lose eligibility for cost-sharing reductions (CSRs), which greatly reduce their deductibles and other out-of-pocket costs. For these folks, making the switch means that the average up-front deductibles will skyrocket. For 2026, the average deductible for a CSR plan for people with income up to 150% of the FPL is $80; if that person can’t afford the premium and enrolls in a lower-premium bronze plan, the deductible spikes to nearly $7,500.
The FFM has not released a snapshot of enrollments by plan metal tier, but SBMs are seeing a troubling trend toward less coverage. For example, in California, approximately 73% of enrollees who shopped for a plan and switched metal tiers for 2026 switched to a Bronze plan, compared to 27% at this time last year.
These differences are even more salient when considering how people use care. Covered California, California’s SBM, calculated based on 2024 claims data, that out-of-pocket costs doubled on average for a selection of common medical conditions in Bronze versus Silver plans. The out-of-pocket cost for pregnancy and delivery, for example, was more than $3,800 higher in a Bronze plan as compared to a Silver plan, while the costs for breast or prostate cancer were each about $1,800 higher.
These cost increases come at a time when 61% of Americans enrolled in Marketplace coverage say it is already very or somewhat difficult to pay their deductibles. Americans cannot bear higher health care costs with nearly 60% of Marketplace enrollees saying they could not afford even a $300 annual increase in health insurance costs without disrupting other finances. If faced with a $1,000 increase in health care expenses, two-thirds of people report they would need to scale back on basic household necessities.
The Early Numbers Are the Tip of the Iceberg
The higher disenrollment numbers at the end of open enrollment are only the first chapter of this story. Consumers need to pay their first-month premium in order to “effectuate” their coverage. People who enroll in a new Marketplace plan have up to 30 days to pay their premium (less for some insurers), whereas people who continue in last year’s plan but don’t pay their initial premium can enter a grace period; if they fail to catch up on premiums after three months, they lose coverage retroactively. Given the premium shock for many, final effectuation data could prove even lower than typical during years before the ePTC — effectuation rates used to be around 85% but reached a record high of 96% in 2025 because of ePTC.
Also on our radar screen is the level of attrition across the plan year. Attrition is a normal occurrence — people leave the Marketplace when they get new coverage through an employer or become eligible for Medicaid. However, this year is likely to see higher attrition because of affordability barriers. With people experiencing an affordability crisis in so many other areas of their household budgets, more people are likely to run out of money faster, making January’s premium stretch impossible after a few months and leading to the run-out of their payment grace period.
Finally, fewer new people are enrolling in Marketplace coverage this year. The number of new enrollees has slipped by nearly 400,000 nationwide (10%). Some states like California are seeing new enrollment decline by nearly one-third and Pennsylvania has had a 15% drop, with most happening among those with income between 150% and 200% of the FPL (roughly $23,500 and $31,300 for a single person). High costs keep the uninsured out, including working individuals who gain income to rise above the Medicaid eligibility line but can’t overcome the affordability cliff created by the ePTC expiration. High premiums have other economic effects, too. For example, entrepreneurs— who made up more than one-quarter of Marketplace enrollees in 2023 — may be deterred from starting businesses, a phenomenon known as “entrepreneurship lock.”
Some States are Holding the Line, For Now
Several states have increased their own subsidies to help their residents in the face of losing help, but those efforts cannot fill the gap long term. Maryland has expanded its existing state Marketplace subsidy for one year to fully cover the reduction in federal subsidies for all Marketplace enrollees with household income up to 200% of the FPL and to cover half of the lost federal subsidies for enrollees with income between 250% and 400% of the FPL. Similarly, Connecticut’s governor announced that the state is allocating $70 million to replace the lost federal ePTC for people with income between 100% and 200% of the FPL and half of the ePTC for people with income between 400% and 500% of the FPL, who are no longer eligible for any federal subsidy. Without state help, Connecticut enrollees lose $295 million in expiring federal subsidies. Other SBMs tell similar tales, but this stopgap funding is insufficient and time limited — pushing affordability problems until next year.
The Bottom Line
Early numbers show just how important Marketplace coverage is for millions of working Americans, but with premiums doubling after the loss of ePTC, people will either pay vastly more for the same plan or get pushed into Bronze coverage with high deductibles that leave them exposed to debt when they need care. Marketplace enrollment is falling for the first time since 2020, and even these numbers likely overstate stability: Effectuation will fall as families struggle to make their first payments, and attrition will climb as budgets run dry in an already strained consumer economy. A handful of states are doing what they can with temporary subsidies, but these patches are thin and fleeting. They can’t replace lost federal support.
Affordability has significantly decreased, coverage is eroding, and millions are being pushed into plans that may not protect them when they need it most. The pain showing up in the data is only the beginning — and the financial and health consequences for consumers will be far worse by year’s end.