MW 'There's nothing affordable in the Affordable Care Act' - and people will likely pay even more in 2027 than 2026. Here's why.
Andrew Keshner
The future is bleak for Obamacare premiums as people flee higher insurance costs
Two bills addressing the cost of 2026 Obamacare premiums failed to pass the Senate on Thursday. As price-shocked customers leave ACA plans, premiums could rise even more.
As a tax specialist and health insurance agent, Elina Linderman ran the numbers and came to a difficult decision: She will go without health insurance next year, for the first time in decades.
To buy basic coverage through the Affordable Care Act's marketplace without the tax subsidy that's set to expire on Dec. 31, Linderman, who lives in Clearwater, Fla., would have to pay roughly $1,500 per month in 2026. That's around 50% more than this year, and the plan would offer less coverage than her existing one.
"It just doesn't make financial sense," said Linderman, 51. She's healthy and is prepared to pay directly for services and generic medications. "If something terrible happens, if it is an emergency, well, I'll take a risk."
Linderman owns La Rusa LLC, an accounting and payroll firm that also assists clients with their health insurance. She sees many of her clients grappling with the same decision on whether to forgo coverage in 2026. "Everybody is struggling," she said.
On Thursday, a divided Senate failed to pass a Democrat-backed bill to extend the pandemic-era enhancements to the premium tax credit for three years. A Republican bill to send money to enrollees through specialized savings accounts also failed to garner enough votes.
The vote came days ahead of a Dec. 15 deadline to enroll in ACA plans that start coverage on Jan. 1. The gridlock heightens the chances that higher 2026 premiums will materialize for people on ACA plans once the enhanced subsidies vanish with no new laws providing relief.
And at this point, 2027 premiums seem destined to increase even more, as people like Linderman balk at prices and abandon their ACA plans, experts say.
To understand why, fast-forward one year, when insurers will be offering plans for 2027. If many others make the same decision as Linderman and leave the ACA marketplace, insurers will be setting prices with the aim of spreading the costs of medical care and prescriptions among a smaller pool of customers. In addition, there could be fewer ACA customers next year because of new rules that will shorten the open-enrollment window and tighten eligibility.
Another factor that could lead to higher costs: The pool of 2027 policyholders will also likely be older and sicker on average than it is now, said Brad Ellis, a senior director at Fitch Ratings, who leads the company's North American health insurance sector.
"It's sort of like a spiral," Ellis said.
It's too soon to forecast exactly what 2027 ACA premiums will look like, but the cost will probably keep marching higher, Ellis said. "The rate of growth may decline, but the premiums themselves are highly unlikely to decline."
Overall, having fewer young and healthy policyholders on ACA plans could lead to an average increase of 7% to 11.5% in the premium before the tax credit for remaining policyholders, according to actuaries at Wakely, a healthcare actuarial services and consulting firm. That's not even factoring in the medical inflation that typically increases a premium, they noted.
A record 24.2 million people this year have coverage through plans purchased on Healthcare.gov and state-run marketplaces. The ACA marketplace is a destination for self-employed workers and early retirees who don't yet qualify for Medicare coverage, which starts at age 65.
One-quarter of enrollees say they'd likely skip insurance in 2026 if their premiums more than doubled, according to a KFF poll last week.
There are already signs of an outflow.
So far, approximately 5.75 million consumers have signed up, which is slightly higher than the same point last year, according to the Centers for Medicare & Medicaid Services. But fewer consumers who currently don't have a marketplace plan have enrolled for next year, the numbers show.
In Pennsylvania's marketplace, Pennie, there's been a 20% drop in new enrollees compared with the same point in early December 2024. The greatest number of households ending coverage consist of people ages 55 to 64, according to Pennie.
The second-largest group of people terminating coverage are between the ages of 26 and 34, and that "adversely impacts risk pools and drives premiums higher," according to the exchange's website.
Executives at Oscar $(OSCR)$, a healthcare technology and insurance company that offers marketplace plans in 20 states, also foresee a shrinking base of policyholders for all plans across the country. The contraction could be 20% to 30% due to the expiring tax credits and new rules, Scott Blackley, Oscar's chief financial officer, said at a UBS conference last month.
The original premium tax credit is still in effect. But if lawmakers eventually reach a deal to lower 2026 premiums, some state-run exchanges have said they are ready to widely announce the changes and what they mean for enrollees and potential customers.
However, public-awareness campaigns may only help so much, said Ellen Montz, a managing director with Manatt Health who previously led operations at Healthcare.gov.
There will likely be a swath of "burned" ex-customers who saw the initially higher 2026 premiums and gave up. It could take years to convince these onetime policyholders to return, she said. "You've kind of broken trust with your consumer," Montz told MarketWatch.
'Those that are sick, they are going to figure it out'
There are options for health insurance beyond marketplace plans, but they may have drawbacks. Insurers sell short-term plans in 36 states that provide temporary coverage, but those plans are allowed to set prices or deny coverage based on pre-existing medical conditions.
Faith-based cost-sharing programs are another alternative some are considering, but those are not technically health insurance. Linderman said she checked a range of alternatives and none made financial sense for her.
"Those that are sick, they are going to figure it out. They are going to have to pay for it," said health insurance agent Ronnell Nolan. One of her client couples with two children is bracing to pay $3,000 in monthly premiums next year instead of their current $1,000. The husband is recovering from triple-bypass surgery, she noted.
Nolan also has clients who are planning to skip 2026 insurance for themselves but want to make sure their kids stay covered.
As president and CEO of Health Agents for America, an advocacy association, Nolan hears from agents who say it's been the worst enrollment season in decades as they try to explain the price jumps to people. "Every conversation is almost a tearjerker," she said.
The organization supports a temporary extension of the enhanced ACA subsidies and, ultimately, some plan for reducing costs. "We need to do something. There's nothing affordable in the Affordable Care Act at all," Nolan said.
Some people who desperately need 2026 coverage may still have no choice but to forgo it.
That includes Joseph Morris, 61, who takes three blood-pressure medications and recently learned he has glaucoma. The Portland, Ore., hairstylist now pays a $229 premium with a deductible of approximately $11,000. When the enhanced subsidies were in effect, his premiums remained stable, he said. "They were how I kept my premiums the same."
His bronze-tier plan has limitations, but at least it's some form of insurance, Morris said, but he is now "looking down the loaded barrel" of possibly going without insurance next year.
Whatever cough, ailment or condition comes his way, Morris said he "would have to second-guess every medical and health maneuver" and whether it justified a doctor's visit.
"I'm a good guy, or so I think I am. I feel that I deserve better than what is about to be thrown at my feet here," Morris said. "The impression I'm getting is I'm not important, I'm not better, I'm expendable."
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-Andrew Keshner
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December 11, 2025 14:30 ET (19:30 GMT)
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