Millions of people are likely to drop their health insurance now that enhanced premium subsidies for consumers who buy coverage on the Affordable Care Act marketplace have expired. That could increase costs for remaining enrollees, leading some experts to warn of a potential “death spiral” in the ACA market.
The lapse of enhanced premium tax credits at the end of 2025 led insurance premiums to more than double for the average subsidy recipient, to $1,904 per month in 2026 from $888 last year, according to estimates from KFF, a nonpartisan health policy research group.
Young, relatively healthy people are the most likely to drop their policy if they deem premiums to be too high and think coverage is not worth the cost, economists said.
That would leave an older, sicker population of enrollees, who are more likely to use their insurance and require costly care, economists said — which might prompt insurers to raise premiums further to offset the higher costs in a self-reinforcing cycle.
“If these [relatively young, healthy] individuals, whose health care costs are lower on average, exit the risk pool, the average cost of care will increase and thereby cause premiums to increase further,” Meredith Rosenthal, chair of the Department of Health Policy and Management at Harvard University’s T.H. Chan School of Public Health, said recently in a written interview with the university.
