How ACA marketplace cuts pushed two NC families to make tough healthcare choices

Black Mountain resident and small business owner Madison Maxwell decided this year to forgo health insurance coverage after seeing her premium more than double.

Maxwell, 40, runs a piano teaching studio in South Asheville, and her husband does contractor work in the tree service industry.

Neither of them has an employer who provides health insurance coverage, and they’ve gotten coverage in previous years through the Affordable Care Act marketplace.

But last year, enhanced marketplace subsidies expired after Congress did not extend them, and their costs jumped.

Their premium would have increased from $285 a month for the two of them on a bronze plan — the lowest level option aside from catastrophic plans, which have limited eligibility — to nearly $600 a month for a comparable plan.

“When I saw the numbers, I mean, it was like a punch in the gut,” said Maxwell.

The increase came as the couple was already facing higher expenses.

In 2024, they lost their mobile home to Helene after a tree fell on it. They were able to pay off the mortgage on that home with the insurance payout, “but that meant that we basically had to start over from square one.”

The couple decided to build a new home, but even with a Small Business Administration loan, they needed private financing at current market rates. They also paid for a rental while the home was under construction and moved in June. Maxwell said their mortgage increased from about $1,000 a month to $3,000 a month.

The couple ultimately decided they could not afford the higher insurance premium.

“We had to make the very uncomfortable calculus of how much do we pay for prescriptions a month, and, how often do we actually go to the doctor, and what kind of testing do we do annually, and how much does that stuff usually cost out of pocket, and determine whether or not we could just afford to roll without health insurance,” she said.

Many North Carolinians have dropped their coverage this year.

Following the loss of enhanced subsidies, average monthly premium payments increased 58%, from $113 to $178, between 2025 and 2026, according to a May report by KFF, a health policy research organization. Deductibles also rose 37%, or $1,027 per person, to a record $3,786 in 2026 — the steepest increase in the marketplace’s history. The increase reflects more enrollees choosing lower-tier plans, which tend to have higher deductibles, according to KFF.

For the first time in seven years, marketplace enrollment also declined. February effectuated enrollment — the number of people who selected a plan and kept their coverage active — fell to 19.2 million in 2026 from 21.8 million in 2025, a drop of about 12%, according to federal data. North Carolina saw an even steeper decline. February effectuated enrollment fell 21%, from 774,226 in 2025 to 609,544 in 2026.

Many people selected a plan and were enrolled for a month or two before being terminated for non-payment or another reason. That underscores “the fact that when folks lost affordable coverage, it really meant that they lost coverage altogether,” said Natasha Murphy, director of health policy at the Center for American Progress. “Illnesses don’t stop when you lose your insurance card,” Murphy said.

North Carolina’s drop in effectuated enrollment was one of the larger declines in the nation. For Louise Norris, a health policy analyst with HealthInsurance.org, enrollment declines have been steepest in states that rely on the federal Marketplace, including North Carolina. She said that may be because some states operating their own marketplaces added supplemental subsidies to offset higher costs.

The impact also varies by location, since insurers offer different plans in different parts of the state. North Carolina also saw three insurers leave the Marketplace at the end of 2025, with Cigna expected to exit in 2026.

Since losing coverage, Maxwell said the couple has begun accumulating medical debt.

They have about $2,000 in medical debt now. In summer, they got hit with bills from doctor visits they had earlier in the year. She’s also gotten a $1,000 bill a couple of weeks ago for physical therapy she had done last year when she had health insurance.

Losing coverage has left Maxwell worried about how she would handle a medical emergency. She and her husband both have asthma, and she said she has been rationing her medication while using a supply she stocked up on before their coverage ended. She is also concerned about affording routine screenings, including mammograms and colonoscopies. Her husband works a dangerous job cutting down trees and has already needed physical therapy for shoulder problems.

“If something were to happen to him and it was catastrophic, I don’t know what we would do,” Maxwell said. “If I had a sudden need to be hospitalized or we found something on my mammogram, that would put me in a much more dire place financially. I do think about that, and I do worry about that.”

For Kai Schmoll, a 60-year-old Asheville business owner who has owned an event staffing company specializing in bar, kitchen and service staff for about 13 years, the increase in costs would’ve been hefty.

Had he not found a workaround, his premium for the same marketplace plan would’ve jumped from $580 a month in 2025 to $2,959 a month in 2026.

That would’ve amounted to about $36,000 a year — or roughly a third to a quarter of his income, depending on his earnings that year.

Schmoll told The News & Observer he wouldn’t have been able to afford that increase but as a cancer survivor, “I can’t just say I’m going to go without insurance this year.”

His situation is emblematic of why some marketplace enrollees saw heftier increases.

The Affordable Care Act marketplace was created in 2010 under the Obama administration and allows people to buy private health plans, with most enrollees receiving subsidies to lower their monthly costs .In 2021, Congress expanded the subsidies to make coverage more affordable during the COVID-19 pandemic.

The changes removed a previous income cap that barred households earning more than 400% of the federal poverty level — about $63,000 for an individual or $86,000 for a family of two — from receiving subsidies and lowered the share of income families were expected to contribute toward premiums.

The enhanced subsidies were extended through 2025 under the Inflation Reduction Act, signed by then-President Joe Biden. But they expired after congressional Republicans, at the urging of President Donald Trump, opposed extending them during a broader government funding fight leading to a protracted shutdown, while Democrats pushed to continue them. The expiration returned the marketplace to pre-2021 rules, reducing assistance for some enrollees and reinstating the 400% income cap.

Because Schmoll’s income exceeded the cap, he stood to lose his assistance. Instead of dropping coverage, he reached out to an insurance representative he had worked with for years, who helped him find a workaround to cap his income so he could continue qualifying for subsidies, allowing him and his husband to remain on a similar marketplace plan at about $600 monthly.

“So I own a business. I take on all of the risk. I take on all of the responsibility. I’m responsible for the livelihood of a lot of people, and I’m not allowed to make as much money as I can,” he said.

Others in similar situations to Schmoll’s have chosen to drop coverage.

A disproportionately large share of the decline in sign-ups (27%) is among people with incomes just above the “subsidy cliff” — or between 400%-500% of the federal poverty level — despite this group making up just 3% of plan selections in 2025, according to KFF.

Capping his income, Schmoll said, was easier this year because he was already making less money after Helene affected his business. He also said he is investing more money in his business, such as on marketing, which results in higher expenses and lower taxable income.

“This is a self-imposed workaround to try to make this system work for us as best we can, and I know that there are other people who don’t necessarily have the luxury,” he said. But, “It doesn’t feel like capitalism to me. It doesn’t feel like ‘pull yourself up by your bootstraps and be as successful as you can be.’”

More cost increases are on the way across the country. And that’s not new.

Marketplace premiums have risen over time, with insurers citing higher healthcare costs and changes in who is enrolling in coverage as factors behind rate increases.

In North Carolina, last year, the state Department of Insurance approved 2026 rate increases in the individual market ranging from 16.88% to 36.40% after reviewing insurers’ requests. And nationwide, insurers last year sought their steepest premium increases since 2018, citing, among other factors, the expected expiration of enhanced subsidies. Insurers said the loss of the subsidies would make coverage less affordable as those who are younger and healthier would leave, increasing costs for those who remain.

That trend is expected to continue into 2027, according to Norris. Insurers’ rate filings indicate they expect younger and healthier consumers to continue dropping coverage, said Norris. “The other piece is just increasing specialty medicine costs, increasing hospital costs, increasing drug costs. All of that goes into just overall healthcare costs going up,” Norris said.

Marketplace insurers that have filed, said Norris, have proposed rates seeking double-digit premium increases, generally between 10% and 20%.

Under the Affordable Care Act, insurers in the individual market are required to spend at least 80% of the premiums they collect on medical claims and quality improvements.

North Carolina’s proposed rates are not yet public, but the federal government is expected to release nationwide proposals by the end of the month, Norris said.

The proposed increases do not mean everyone will see increases. Most people continue to receive subsidies that limit how much they pay based on their income.

That differs from 2026, when the expiration of enhanced subsidies meant many had to contribute a larger share of their income toward premiums. When the Trump administration opposed extending those enhanced subsidies, officials argued they would stop subsidizing insurer rate increases and help reduce fraud, waste and abuse. Trump also proposed replacing the subsidies with direct aid to consumers, though that did not happen.

The administration has also made other Marketplace changes, including ending a year-round enrollment option for some low-income consumers, cutting navigator funding by roughly 90% and proposing changes that could increase out-of-pocket costs for some lower-tier plans, though those changes are tied up in court.

The North Carolina Navigator Consortium, a statewide network of health insurance navigators, saw a steep decline in navigator staffing after the funding cuts. Nicholas Riggs, the consortium’s director, said many consumers needed help understanding the subsidy changes.

“It was a very confusing time for a lot of the folks that we serve,” he said.

Murphy said the loss of affordable coverage could ultimately increase healthcare costs rather than reduce them.

“Healthcare needs don’t evaporate,” she said. “We definitely anticipate seeing folks continuing to put off care, and unfortunately, that is going to have that kind of trickle down and trickle across the ecosystem.”

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