The Subsidy Cliff Bites: ACA Marketplace Enrollment Headed for a Five-Million-Person Drop in 2026

Enrollment in the Affordable Care Act marketplace may ultimately fall by about 5 million people in 2026 relative to 2025, as Americans face sharply higher costs triggered by the lapse of federal subsidies for healthcare premiums, according to a new analysis by KFF, a nonpartisan health policy research group. Marketplace enrollment could decline to roughly 17.5 million people this year from 22.3 million last year, a 21.5% drop, in the United States' largest individual health insurance market.

What the analysis is based on

The KFF analysis, published on Tuesday, May 19, 2026, is based on federal data and premium payment estimates from Wakely Consulting Group, a healthcare consultancy and actuarial shop. Its estimate arrives five months into the plan year and reflects not only open enrollment sign-ups but the harder measure of who actually pays: a significant number of enrollees are expected to lose their health coverage midyear because they are financially unable to make premium payments to insurers, and KFF cautions that a more complete picture may not be available until later.

The premium shock behind the drop

Healthcare premiums for plans bought on the ACA marketplace, which is leveraged by the self-employed, gig workers, early retirees and others, have soared this year after Congress failed to extend the so-called enhanced subsidies, also known as enhanced premium tax credits, first enacted in 2021 during the Biden administration. An extension of those credits was a key factor underpinning the record-long government shutdown in the fall: Democrats pushed for an extension but were blocked amid Republican opposition, while President Donald Trump and congressional Republicans have pushed for different policy ideas, such as sending direct payments to households for health expenses.

Heading into 2026, KFF estimated that average ACA premiums would spike by 114% if all enrollees stayed in the same health plan. Ultimately premiums rose about 58%, to 178 dollars per month from 113 dollars per month. The increase, while still high, was less than initially forecast because many households switched to health plans with lower premiums and higher deductibles, and households facing the steepest premium increases were more likely to leave the market altogether.

The bronze migration and the deductible record

The switching behaviour shows up in plan mix. About 9.2 million people signed up for so-called bronze plans in 2026, up from 7.3 million in 2025; such plans cost less up front but carry higher out-of-pocket costs on the back end if households need to use their insurance. As a result, the average deductible for households across all ACA health plans swelled by 37%, to 3,786 dollars in 2026 from 2,759 dollars in 2025, the steepest increase in history according to KFF.

Open enrollment already signalled the contraction

Households splitting between costlier marketplace plans and cheaper high-deductible bronze cover after the subsidy lapse

About 23 million people signed up for ACA marketplace coverage during the open enrollment period for 2026, a decline of about 1.5 million people from 2025 and the sharpest single-year drop in raw numbers since the ACA marketplaces launched. The KFF projection implies that the effectuated count will fall further as nonpayment attrition runs through the year, taking the market from 22.3 million to roughly 17.5 million people.

What to watch next

Midyear effectuated enrollment data, which will show how many of the 23 million sign-ups actually kept paying premiums.
Whether Congress returns to the enhanced premium tax credits, the extension fight that helped drive the record-long shutdown.
Alternative Republican proposals, including direct payments to households for health expenses, and whether any gain legislative traction.
Household behaviour: the continuing shift into bronze plans and the record 3,786 dollar average deductible as measures of how families absorb the cost.
Political fallout, with households citing health costs as a top financial concern in a midterm election year where affordability has emerged as a central theme.

The 2026 marketplace is the clearest natural experiment yet in what the ACA looks like without its pandemic-era subsidy layer: premiums up 58% in practice and 114% in the stay-put scenario, deductibles at a record, sign-ups down by the sharpest raw margin in the programme's history, and a projected five-million-person hole in coverage by year end. Whether that hole becomes permanent depends less on insurance mechanics than on the same congressional arithmetic that let the credits lapse in the first place.