ACA Enrollment Drops 1.4M as Subsidies Expire

Millions of Americans are facing a sudden increase in health insurance costs following the expiration of enhanced Affordable Care Act subsidies. A new report from the Centers for Medicare & Medicaid Services (CMS) reveals a significant drop in marketplace enrollment for 2026.

The data indicates that 1.4 million fewer people enrolled in ACA plans this year compared to January 2025. This reversal ends a decade-long trend of rising coverage and signals potential financial and health challenges for households across the country.

The latest figures from the Centers for Medicare & Medicaid show a sharp contraction in the ACA marketplace. Enrollment numbers dropped to 1.4 million fewer people this month compared to January 2025, reversing a historic growth trend that saw coverage jump from 11 million to over 24 million between 2015 and 2025.

The decline was not uniform across the nation. The most significant dips were concentrated in the South and Southeast, though the majority of states reported a downswing. Specific states that saw the largest decreases include:

• Florida (over 260,000 people)
• Ohio
• North Carolina
• Georgia

Conversely, a few states managed to buck the trend. Texas and California both reported increases in registration. Experts suggest that local policy differences, such as state-level subsidies, may have insulated residents in those areas from the federal changes.

The primary driver behind the enrollment drop is the expiration of enhanced ACA subsidies on December 31. These credits, originally passed in 2021, allowed individuals with incomes up to 400% of the poverty line—approximately $128,600 annually for a family of four—to claim significant relief on healthcare costs.

Without these credits, low- and middle-income Americans are seeing a dramatic spike in out-of-pocket expenses. Estimates from KFF suggest that premium costs could more than double compared to last year for many marketplace enrollees.

People will face big bills that they either can't pay, and that hurts their credit. Or they do pay, but it requires them to skimp in other areas.

According to Matthew Fiedler, a senior fellow at The Brookings Institution, the financial strain extends beyond immediate bills. He notes that the loss of affordable coverage directly threatens household financial security and long-term stability.

The expiration of subsidies became a focal point of political contention in late 2025. Efforts to renew the credits were a key factor in the latest government shutdown, as lawmakers in Congress failed to reach a consensus before the deadline.

While Republicans have stated intentions to develop a compromise healthcare strategy, a plan released by the administration on January 15 notably omitted any mention of subsidies. The plan instead focuses on lowering drug prices, implementing cost-sharing programs, and increasing transparency.

The basic contour of the plan is contradictory.

Gideon Lukens, a senior fellow at the Center on Budget Policy and Priorities, criticized the administration's approach. He argued that the plan lacks clarity on how it would prevent the premium spikes currently facing millions of Americans.

Analysts warn that the 1.4 million drop may only be the beginning. The January CMS report captures enrollment selections and automatic renewals, but it does not account for whether individuals have actually paid their premiums.

As households begin receiving medical bills, experts anticipate a steeper decline in coverage. A recent report from the Congressional Budget Office estimates that nearly 4 million Americans will lose or drop their insurance over the next decade.

Many likely signed up when the premiums they would end up facing were uncertain and then waited to see what they would have to pay.

Matthew Buettgens, a senior fellow at The Urban Institute, explains that the initial enrollment numbers likely include many who are now re-evaluating their options. Beyond individual households, the lapse in subsidies places pressure on healthcare providers. Hospitals may face an influx of uninsured patients and reduced revenue, potentially pushing financially fragile facilities to closure.

The landscape of American health insurance is shifting rapidly as the full effects of the subsidy expiration take hold. With ACA votes stalled in the Senate until late January and no immediate federal solution in sight, the burden of rising costs falls directly on consumers.

The coming months will be critical as the Trump administration pushes for alternative cost-lowering measures. However, without direct premium support, the risk of widespread coverage loss and worsening health outcomes remains a significant concern for policymakers and healthcare advocates alike.