Newsletter

AFFORDABLE CARE ACT ENROLLMENT DECLINES SIGNAL HIGHER PREMIUMS AHEAD

Reporting from KFF (Kaiser Family Foundation) Health News shows that enrollment in Affordable Care Act plans is falling sharply in 2026, and the trend is already creating pressure for higher premium rates in 2027.  

Enrollment began the year down by 1.2 million people compared with last year’s record numbers. Premiums for 2026 increased by an average of twenty-six percent, while many of the enhanced federal subsidies that had helped consumers in prior years were reduced or eliminated. As a result, many households experienced significant “sticker shock” when their first invoices arrived.

In an article published by the Kaiser Family Foundation on May 19 the Wakely Consulting Group reported that 86% of people enrolled in an individual marketplace plan paid their first month’s premium. 

Internal federal marketplace data reported by news outlets suggests that one in five people on the federal exchange failed to pay their January premium. State based exchanges performed somewhat better, especially in states that used their own funds to offset the loss of federal subsidies.

Kaiser Family Foundation says the 23.1 million enrollees as of the end of open enrollment is the "sharpest single-year drop" since the exchanges launched and predicts that enrollment could drop an additional 17 to 26% (between 3.9 and 5.3 million) over the course of 2026 due to unpaid premiums, mid-year attrition and other factors.

Analysts warn that the people most likely to drop coverage are younger and healthier individuals. When healthier people exit the market, the remaining risk pool becomes older and sicker, which increases the cost of claims for insurers. That dynamic is one of the strongest predictors of future premium increases.

Actuaries are also concerned that regulatory guidance governing 2027 Affordable Care Act plans arrived months later than usual. Insurers are being asked to price next year’s plans while enrollment is shrinking and medical risk is rising. Several experts expect that many states will see double digit premium increases again in 2027.

The bottom line: declining enrollment, reduced subsidies, and a sicker risk pool are combining to create significant upward pressure on future Affordable Care Act premiums.

THE SHIFT TOWARD BRONZE PLANS AND WHAT IT MEANS FOR 2027

A major trend emerging in 2026 is the rapid movement of consumers into Bronze level Affordable Care Act plans. Bronze plans offer the lowest monthly premiums but come with the highest deductibles and out of pocket costs. When premiums rose sharply and subsidies declined this year, many households chose Bronze plans simply because they were the only affordable option.

According to national enrollment data, Bronze selections increased from thirty percent of all Affordable Care Act enrollments in 2025 to forty percent in 2026. That represents an increase of nearly two million people choosing the lowest cost tier.

This shift has several important implications for 2027:

• Higher uncompensated medical bills: Bronze plans have deductibles that now often exceed three thousand seven hundred dollars per person. Many consumers will delay or skip care, and hospitals may face higher levels of unpaid patient responsibility.

• A sicker remaining risk pool: People who expect to use more medical services tend to avoid Bronze plans because of the high out of pocket exposure. As healthier people migrate to Bronze, the Silver and Gold tiers may become disproportionately populated by individuals with higher medical needs.

• Upward pressure on premiums: Insurers must price plans based on expected claims. If these plans attract a sicker population, premiums for these plans will likely rise again significantly in 2027.

• Greater volatility for insurers: When consumers choose plans with high deductibles, insurers collect lower premiums and face more uncertainty about when claims will occur. This makes pricing more difficult and increases the likelihood of rate increases.

The bottom line: The movement toward Bronze plans is a clear signal that affordability is deteriorating. Unless subsidies increase or premiums stabilize, the 2027 Affordable Care Act market may face even more volatility than in 2026.

PRACTICAL ALTERNATIVES TO AFFORDABLE CARE ACT PLANS FOR INDIVIDUALS AND FAMILIES

With Affordable Care Act premiums rising and deductibles reaching historic highs, many individuals and families are exploring alternatives that provide meaningful coverage without the escalating costs. Several legitimate options exist outside the Affordable Care Act marketplace, each with its own strengths and considerations.

1. Private Group Insurance Plans Written On An Individual Chassis

These plans use the structure of a group insurance contract but are issued to individuals and families who qualify. They often include:

• Access to large national preferred provider organization networks such as Cigna or First Health (owned by Aetna)
• Lower monthly premiums compared with Affordable Care Act plans
• Predictable copay-based benefits rather than high deductibles
• Requirement to pass medical questions to qualify for plan eligibility. There are no pre-existing condition limitations if a person passes these questions and qualifies to enroll in the plan. Because these plans enroll only healthier individuals, premiums are significantly lower than for unsubsidized Affordable Care Act plans, and premiums are kept much more stable. 

For healthy individuals and families who do not qualify for large Affordable Care Act subsidies, these plans can deliver strong value and broad provider access.

2. Guaranteed Issue Plans

We’re aware of at least one product that is issued on a guaranteed acceptance basis with no health questions. This product provides copay benefits for certain medical services through the Multiplan (PHCS) Practitioner & Ancillary network but hospital and certain other benefits are based on a reference-based pricing model.

3. Short-Term Medical Insurance

Short-term medical plans provide temporary coverage with lower premiums and flexible benefit designs. They are not required to follow Affordable Care Act rules which permit them to offer:

• Lower monthly costs
• Freedom to choose providers
• Multiple plan durations (e.g., three one-year plans)

However, they do not cover pre existing conditions and are best suited for people who are healthy and need coverage for a defined period.

Carriers such as Allstate are announcing hybrid plans that bundle flexible short-term coverage with fixed-benefit protection.

4. Medical Cost Sharing Programs

Medical cost sharing (for example, the programs offered by Zion Healthshare and Sedera) is not insurance, but it can be a cost effective option for people who want protection from large, unexpected medical expenses. Most medical cost sharing programs either exclude smokers from coverage or increase share contributions for smokers and/or exclude cancer from sharing if a smoker contracts cancer after age 50; and phase in sharing for pre-existing conditions over a period of three to four years. These programs typically offer: 

• Lower monthly contributions
• Access to any provider (some of these programs require use of network providers)
• Community based sharing of large medical bills

They work best for individuals who understand the limitations and are comfortable with a non insurance model.

5. Direct Primary Care Paired With Catastrophic Protection

Some households combine a direct primary care membership with a catastrophic medical plan or medical cost sharing program. This approach provides:

• Unlimited primary care access
• Transparent pricing
• Protection from major medical events

This model can be significantly more affordable than a traditional Affordable Care Act plan.

Contact Us For More Information

If you’d like more information about or to enroll in any of these alternatives or programs, please call us at 786-970-0740 (cell).

About Paul Cholak

Paul has over forty years of benefits experience and has been Director of Employee Benefits for large companies, as well as a benefits consultant with major consulting firms. He understands the health and life insurance needs of individuals and families of all ages. He also has considerable experience in selling health and life insurance to employer groups.

He guides you through the steps of getting health and/or life insurance and is available to help you both BEFORE and AFTER you've made your purchase decision.