Imagine opening your health insurance renewal notice and seeing your monthly premium suddenly more than double. For millions of Americans, that exact scenario became reality in 2026. After years of breathing room thanks to enhanced subsidies, the expiration hit hard—and the ripple effects could touch just about everyone with marketplace coverage.
I remember talking to a friend last month who was genuinely shocked when his quote came in. One minute he was paying something manageable; the next, it felt completely out of reach. Stories like his are becoming far too common, and they raise a bigger question: what happens when lots of people decide they simply can’t afford to stay insured?
The Sudden Shock of Losing Enhanced Premium Help
The enhanced premium subsidies that made marketplace plans affordable for so many expired at the end of 2025. For roughly 22 million people who benefited from them last year, the change was immediate and severe. Average premiums for those receiving the extra help jumped dramatically—more than doubling in many cases.
Think about that for a second. What used to cost under $900 a month now approaches $2,000 for some households. That’s not a small increase; it’s life-altering. Rent, groceries, car payments—something has to give when a bill that size lands in your inbox.
Health policy analysts have been warning about this moment for a while. When assistance disappears so abruptly, people don’t just grumble and pay up. Many walk away entirely. And that’s where things start getting complicated for the entire system.
Who’s Most Likely to Drop Coverage?
Younger adults—particularly those in their 20s and early 30s—are the group most likely to say “no thanks” when premiums skyrocket. They tend to be healthier overall, use fewer medical services, and often feel they can get by without insurance, especially if money is already tight.
Projections suggest that somewhere around 7 million people could leave the marketplace this year because of the subsidy loss. Of those, roughly 5 million might end up completely uninsured rather than finding another option. And nearly half of that uninsured increase is expected to come from the 19–34 age group.
- They face the steepest relative premium jumps
- Many perceive themselves as low-risk
- They’re often balancing student loans, entry-level wages, or early-career instability
- Alternatives like short-term plans or going without seem more tempting
When healthier individuals exit the pool, the math shifts. The people who remain tend to be older and have more medical needs. Insurers notice this change quickly—and adjust prices accordingly.
The Feared “Death Spiral” Explained
You’ve probably heard the term death spiral thrown around in health policy discussions. It describes a vicious cycle: healthier people drop coverage → average costs per remaining enrollee rise → premiums increase again → even more people leave → costs climb higher still.
Each step reinforces the next until the market becomes unsustainable. It’s the nightmare scenario that keeps regulators and insurers awake at night. And right now, several experts are openly worried that we might be stepping onto the first rungs of that ladder.
If relatively healthy individuals exit the risk pool, the average cost of care rises and causes premiums to increase further. The worry is that this process can spiral and lead to further disenrollment and even higher premiums.
– Health policy researcher
That captures the concern perfectly. It’s not just theory; we’ve seen versions of this play out in individual insurance markets before enhanced subsidies existed. The big unknown is how far things will go this time.
Insurers Already Responded—Premiums Up 26% on Average
Insurance companies don’t wait around to see what happens. They file rate requests with state regulators based on their best predictions. For 2026, many carriers built in significant increases—and a portion of that was explicitly tied to the expectation that healthier enrollees would leave.
On average, gross premiums (before any tax credits) rose about 26%. A meaningful slice of that—around 4 percentage points—was attributed directly to anticipated changes in the risk pool. The rest comes from normal cost drivers: expensive new medications, higher provider rates, wage inflation in healthcare, and so on.
What’s interesting is that even people who still qualify for regular tax credits might feel some pain. While their out-of-pocket premium is capped as a percentage of income, the overall market dynamics still matter. Higher underlying costs can affect plan choices, networks, and deductibles.
Why Some Experts Say “Death Spiral” Fears Are Overblown
Not everyone is hitting the panic button just yet. Several policy scholars argue that the current structure contains built-in safeguards that make a true death spiral unlikely—or at least much harder to trigger.
The key protection? The remaining premium tax credits are tied to income, not to a fixed dollar amount. If premiums rise, the federal government covers most of the extra cost through larger tax credits. That keeps the out-of-pocket burden relatively stable for lower- and middle-income enrollees.
Before the enhancements, people paid anywhere from roughly 2% to 10% of income toward premiums, depending on where they fell on the income scale. That sliding-scale design still exists. So even if insurers raise rates significantly, qualifying consumers aren’t hit with the full increase.
Higher premium costs mostly get translated into higher government subsidies. Millions fewer people may enroll, but there would still be stable risk pools by virtue of the income caps.
– University health policy professor
In other words, the system absorbs a lot of the premium inflation automatically. That cushion didn’t exist in the same way before the ACA, which is why earlier markets sometimes collapsed when healthy people fled.
Plus, this is largely a one-time shock. Once the dust settles and the healthier dropouts are gone, the remaining pool should stabilize—albeit smaller and possibly more expensive overall.
The “Subsidy Cliff” Hits Higher Earners Hardest
Another group feeling serious pain right now is people just above the subsidy eligibility line. Households earning more than 400% of the federal poverty level—about $62,600 for a single person in 2026—receive no premium assistance at all.
Many of these folks enjoyed reduced rates under the temporary enhancements. Now they’re facing the full unsubsidized premium. For some, that means going from roughly $4,400 a year to $8,500 or more. That’s a brutal jump.
These higher earners are often the ones most likely to drop marketplace coverage entirely. Without any financial help, the value proposition disappears quickly—especially if they’re healthy and haven’t used much care.
- Calculate household income against the current federal poverty guidelines
- Check whether you fall below 400% FPL
- Compare unsubsidized premiums against expected medical usage
- Weigh short-term plans, employer options, or self-pay risks
It’s a tough calculus, and many are choosing to roll the dice without coverage for now.
What Could Actually Trigger a Serious Spiral?
Here’s where things get really interesting. Several analysts point out that the current income-based credit design actually protects against a full-blown collapse. But certain policy changes could remove that safeguard.
One frequently discussed idea is switching to a flat-dollar subsidy—giving everyone the same fixed amount regardless of premium level or income. In that scenario, any premium increase would fall entirely on the consumer. That removes the automatic buffer and makes a spiral far more likely.
The more assistance gets pulled back, the greater the risk becomes. It’s a delicate balance: help too little and the market unravels; help too much and critics argue it distorts incentives or costs taxpayers excessively.
Broader Implications for Healthcare Costs and Access
Beyond the marketplace itself, the fallout could affect the wider healthcare system. When more people go uninsured, they often delay care until problems become emergencies. That leads to higher overall costs—many of which get shifted onto insured patients and taxpayers through uncompensated care.
Hospitals, physicians, and other providers feel the strain. Preventive services get skipped. Chronic conditions worsen. Emergency rooms see more avoidable visits. It’s a classic case of penny-wise, pound-foolish.
There’s also the human side. I’ve seen families wrestle with these decisions up close. Choosing between insurance and other essentials isn’t abstract policy—it’s real stress, real worry, real consequences.
Looking Ahead: What We’ll Learn in the Coming Months
We won’t know the full picture for a while. Enrollment data trickles in gradually, and detailed demographic breakdowns usually arrive later in the year. By mid-to-late 2026, we should have a clearer sense of exactly how many people left, who they were, and how the risk pool changed.
In the meantime, open enrollment numbers, insurer financial reports, and claims data will offer early clues. If premiums spike again in 2027 or if carriers start exiting markets, that would signal deeper trouble.
For now, the system hasn’t collapsed. But it’s under real pressure—and millions of families are feeling it directly. Whether we avoid the worst outcomes depends partly on how people respond, partly on insurer behavior, and partly on whether policymakers decide to step in again.
The expiration of enhanced subsidies was always going to be a stress test for the ACA marketplace. So far, it’s living up to that billing. How the story ends is still being written—one enrollment decision, one premium filing, one policy debate at a time.
What do you think will happen next? Have you or someone you know been affected by these changes? The coming year should give us plenty of answers.
