Health insurance marketplace feels growing tremors from GOP cuts

State Obamacare marketplaces are starting to feel tremors from the GOP-controlled Congress's ending of enhanced subsidies, as millions of Americans are dropping coverage.

Experts and state officials say the impact varies from state to state, but enrollment decline is expected to grow this year and beyond, as policies from the One Big Beautiful Bill Act and potential Trump administration regulation changes take effect.

According to preliminary data released by the Centers for Medicare and Medicaid Services earlier this year, total Affordable Care Act (ACA) enrollment for 2026 fell to about 23 million people, a drop of a little more than 1 million enrollees.

Insurers and analysts think there's been much more attrition since then and are projecting that enrollment could fall by as much as a quarter this year.

Enrollment in HealthCare.gov dropped by nearly 8 percent compared with final 2025 enrollment, while state-based exchanges grew by 2 percent, according to an analysis by consulting firm Oliver Wyman.

At the same time, new consumer enrollment fell by 14 percent, compared with just a 3 percent drop among returning enrollees.

There will also be fewer choices for customers, as the Cigna Group said it will exit the marketplace next year. While Cigna's share of the ACA market is relatively small, it has been a longtime participant.

Cigna is the second major insurer to leave the ACA marketplace, after CVS Health's Aetna stopped offering plans this year.

"I think it's safe to say that when insurers who care about their stock value and their profits begin to leave a market, there's something wrong with that market," Jeanne Lambrew, a former health adviser in the Obama administration and a former top health official in Maine, said.

The loss of the enhanced premium subsidies has hit enrollees hard, and health costs will likely play a key role in November's midterm elections.

California reported 374,000 people canceled their plans this year, compared with 240,000 last year.

"There's no other explanation for such a delta between what is normal and what we've experienced … there's no question people are being priced out of the marketplace right now," Jessica Altman, executive director of Covered California, a state-based marketplace for ACA coverage, said.

In Idaho, which starts and ends its open enrollment two weeks before any other state, officials reported 25,000 people dropped coverage this year.

"Since the end of open enrollment, we are right at 25,000 and we saw about 5,000 disenrollments during open enrollment," Pat Kelly, executive director of Your Health Idaho, said.

"So, while we did see affordability concerns really permeate the purchase decisions all through open enrollment, we are past what we believe is the bulk of the disenrollments … we'll continue to monitor it, but we're feeling pretty comfortable about where we're at," Kelly said.

The Trump administration and the conservative think tank Paragon Health have downplayed the losses, saying they are mostly the result of a drop in fraudulent or improper enrollments.

Most people are eligible for some subsidies even if the enhanced premium tax credits are no longer available.

Democrats shut down the government for a record 45 days last year but failed to get an extension of the enhanced credits in return for their support on voting to reopen the government.

Instead, Republicans promised to give them a vote on a bill of their choosing to extend the subsidies. The vote failed, and the subsidies expired at the start of this year.

Insurers cited the expiring extra subsidies as one of the reasons they charged higher premiums this year, as they anticipated healthier people would drop coverage.

Experts said they are not expecting a "death spiral" in the marketplace or a repeat of 2017 when political uncertainty about the future of the law, combined with rising premiums and plan exits, raised fears of "insurance deserts."

"Will the marketplace be as affordable and as accessible with as many choices? No. Will it collapse? I think the answer is probably no," Lambrew said.

But falling enrollments as well as large numbers of people switching to less generous, high-deductible bronze plans are contributing to concerns about stability.

For instance, Lambrew said 60 percent of ACA enrollees in Maine are now in high-deductible bronze plans.

According to the Blue Cross Blue Shield Association, marketplace enrollment across ACA plans is down approximately 17 percent since January 2025, including declines of more than 30 percent in several markets.

"The dust has yet to settle in terms of what the expiration of the enhanced [premium tax credits] will mean for the marketplace. But it's incontrovertible that it has resulted, and is likely to result in, a smaller and sicker market," Sabrina Corlette, co-director of the Center on Health Insurance Reforms at Georgetown University, said.

"Insurance companies like stability … this is definitely a market that's going to be in flux, in terms of the policies that are being thrown at it, in terms of affecting prices, affecting enrollment," Corlette said.

Overall, insurance companies reported strong first-quarter results. Executives pointed out in earnings calls they are handling the various market pressures by scaling back benefits, charging more or pulling out of markets.

But Lambrew said the first quarter should be viewed with some skepticism, especially because there are so many more enrollees with high-deductible health plans, so companies aren't paying as many benefits.

"What uncertainty usually means is built in a price buffer so that they don't have losses," Lambrew said.