ACA Exchanges Will Continue to Shrink as Fewer Enrollees Pay Premiums, Analysis Suggests

Why It Matters

Shrinking enrollment erodes the ACA’s risk‑sharing model, pressuring insurers to raise premiums and potentially limiting affordable coverage for millions of Americans.

Key Takeaways

• ACA exchanges may shrink 17%–26% in 2026.
• 14% of enrollees skipped premiums in January.
• Premiums doubled for subsidized plans after tax credit expiration.
• Healthier, lower‑cost members exiting, raising average morbidity 2.9%‑6.5%.
• State‑run exchanges show higher premium payment rates than federal marketplace.

Pulse Analysis

The loss of the pandemic‑era enhanced tax credits has triggered the steepest premium surge since the ACA’s inception, pushing average costs for subsidized enrollees above 100% year‑over‑year. This price shock is prompting a sizable share of beneficiaries to forgo payment, effectively removing them from the risk pool. Analysts at Wakely, drawing on data covering roughly 80% of the marketplace, project a contraction of 17%‑26% in total enrollment—far exceeding the modest 5% dip reported by CMS, which counts only nominal sign‑ups.

For insurers, the fallout is two‑fold. First, the departure of younger, healthier participants inflates the average morbidity of the remaining population, with estimates of a 2.9%‑6.5% rise in overall sickness levels. Higher morbidity translates into greater claim costs, squeezing profit margins already pressured by rising medical expenses. Second, state‑run exchanges appear more resilient, achieving higher premium‑payment rates thanks to localized assistance programs, suggesting that policy levers at the state level can mitigate some of the federal marketplace’s volatility.

Looking ahead, the trajectory of premiums and enrollment will hinge on both market pricing strategies and potential legislative action. Insurers that misjudge the depth of the enrollment decline may be forced to hike rates further, risking a feedback loop of attrition. Investors should monitor insurer earnings guidance, especially for companies like Centene with deep exchange exposure, and watch for any bipartisan moves to restore or redesign subsidy structures, which could stabilize the market and preserve affordable coverage for vulnerable consumers.