Opinion: The ACA's premium shock is a governing failure, not an accident

Open enrollment for 2027 Affordable Care Act marketplace coverage begins November 1, and it arrives on the heels of the worst year the exchanges have had since their creation. Sign-ups for 2026 coverage fell by more than a million people, to 23.1 million, the sharpest one-year drop the marketplaces have recorded, according to federal enrollment data released by the Centers for Medicare and Medicaid Services and subsequent analysis by the Kaiser Family Foundation. Insurers are now proposing a second consecutive year of double-digit premium increases for 2027. None of this was inevitable. It is the direct, foreseeable consequence of Congress's refusal to resolve a subsidy fight it has now let fester for more than a year, compounded by an administration that tried to rewrite enrollment rules by regulation and lost in federal court. The result is a program being governed by neglect and litigation rather than by any deliberate judgment about what health coverage should cost or who should get help paying for it.

A cliff that was allowed to happen

The enhanced premium tax credits that had kept marketplace coverage affordable for middle-income families expired at the end of 2025, after Congress declined to extend them. The effect showed up immediately in enrollment data. KFF's review of federal plan-selection and effectuation figures found that average monthly net premium payments for subsidized enrollees who kept the same plan rose 58 percent, from $113 to $178 a month, with KFF's earlier modeling suggesting the increase would have been closer to 114 percent had more people simply absorbed the cost rather than shop or drop out. That gap matters: the realized premium increase looks smaller than projected largely because thousands of price-sensitive enrollees, particularly those just above 400 percent of the federal poverty line, left the market entirely rather than pay the new rate. KFF found that people with incomes above 400 percent of poverty accounted for a disproportionate share of the sign-up decline, and that adults aged 18 to 34 made up roughly 46 percent of it. Younger, healthier people leaving a risk pool is precisely the dynamic that pushes future premiums higher still.

Now the second shoe is dropping. Insurers' filed rate requests for 2027 show a median proposed increase of roughly 15 percent, with state-level weighted averages ranging from under 7 percent in Vermont, Iowa and Utah to 29 percent in Arizona. Separately, insurers are exiting marketplaces in more than twenty states, leaving hundreds of thousands of current enrollees to be shifted into unfamiliar plans rather than simply auto-renewed. The individual out-of-pocket maximum is also rising, to $12,000 for a single person in 2027 from $10,600 this year. None of these figures are speculative; they are drawn from CMS's own published enrollment files and from insurers' public rate filings now working through state review.

Regulatory whiplash on top of the subsidy fight

Layered onto the subsidy expiration is a separate, self-inflicted mess over the basic mechanics of enrollment. A 2025 CMS rule would have shortened the federal open enrollment window and tightened eligibility verification in ways plaintiffs argued would push eligible people out of coverage through paperwork rather than policy. A coalition of cities, including Columbus, Baltimore and Chicago, sued, and their summary judgment filing laid out in granular detail how the rule's changes to income verification and special enrollment periods would depress sign-ups. A federal judge in Maryland agreed, vacating eight provisions of the rule, including the shortened enrollment window, a ruling the Department of Health and Human Services has since appealed even as it told trade press covering the decision that it would comply while the appeal proceeds. The practical upshot is that the enrollment window opening November 1 will run through January 15, as it has in recent years, but only because a court intervened, not because anyone in the executive or legislative branch made a considered decision to keep it that way. Consumers are being asked to navigate a market reshaped twice over in twelve months by forces entirely outside their control.

The fairest version of the other side

There is a legitimate fiscal case against extending the enhanced credits indefinitely. They were enacted as a temporary pandemic-era measure and cost the federal government tens of billions of dollars a year beyond the ACA's original subsidy structure, and reasonable people can argue that a program never meant to be permanent should not become so by inertia. Expiration also forced a useful reckoning: it exposed how much of the enrollment growth of the past three years was concentrated among higher earners who, under the enhanced formula, could qualify for subsidies with no income cap at all, a design flaw worth fixing rather than simply re-funding. A one-way ratchet toward ever-larger subsidies is not self-evidently good policy, and this page should not pretend the credits were costless or above criticism.

But a legitimate debate over the right subsidy level is different from what actually happened, which was no debate at all. Congress let the credits lapse not through an up-or-down vote weighing cost against coverage, but through gridlock during last year's funding fights, with the policy question essentially decided by a calendar deadline nobody defended on the merits. That is a process failure, not a policy choice, and it is consumers facing January decisions who bear the cost of that failure.

What should happen, and what to watch

Congress has roughly eleven weeks, until the January 15 close of open enrollment, to decide whether it wants to revisit subsidy levels with actual deliberation, rather than leaving the next cliff to arrive the same way this one did. A narrower, means-tested extension, paired with the income-cap fix the original design lacked, would address the legitimate fiscal objection without repeating the all-or-nothing expiration that just drove more than a million people out of coverage. Short of that, the people most exposed, those just above 400 percent of poverty, self-employed workers, and residents of the more than twenty states losing insurers, should expect another difficult shopping season and should not assume last year's plan will still exist, let alone cost the same. The HHS appeal of the Maryland ruling and a related second suit over 2027 program-integrity rules are both still pending and could reshape enrollment mechanics again before January. A program that insures tens of millions of people deserves a legislature willing to own its decisions about what that coverage costs, not one content to let deadlines and courtrooms make the choice by default.