The lapse of the Affordable Care Act's enhanced premium tax credits is already bearing out its consequences, with new data from the Commonwealth Fund outlining coverage declines that could leave individuals uninsured or underinsured.
The enhanced premium tax credits, established in 2021 as part of the American Rescue Plan Act, were designed to help more people afford health plans sold on the ACA marketplaces. The subsidies resulted in record-high ACA marketplace enrollment in 2025, reaching 24 million enrollees.
But this latest report from the Commonwealth Fund, which leveraged data from individual states, showed a reversal of that trend now that Congress didn't extend the enhanced premium tax credits. Notably, the subsidy lapse led to fewer marketplace signups in 2026, resulting in a year-over-year shortfall of about 1.5 million.
"Sign-ups declined during 2026 enrollment, but to understand the impact of federal policy changes, it's important to assess what people did after open enrollment ended," the researchers wrote. "Those emerging data point to even more dramatic drop-offs."
The decline in signups is just the beginning. According to the Commonwealth Fund, enrollment is already dropping off, with first-quarter data showing that plan cancellations were up 24% this year over last.
Zeroing in on California, the researchers noted that middle-income consumers who lost the enhanced premium tax credits and Black consumers canceled at rates double those of last year.
On the flip side, low-income enrollees who still receive state-based cost protections continued their plans. This indicates that cost pressures are driving cancellations, the researchers posited.
Even when people don't cancel their plans, there are still signs of dropped coverage, as more folks opt not to pay their premiums at all.
In January 2026, 14% of people who signed up for a plan did not pay their premiums. For some of those consumers, this resulted in a plan cancellation. However, consumers who renew their plans and qualify for tax credits usually get a three-month grace period before full cancellation.
These trends are slated to continue, the Commonwealth Fund said, citing limited state data from April.
The data shows more plan drop-off, which the researchers characterized as "stark." For example, in Maryland, only 2.9% of plans went unpaid in April 2025. In April 2026, that figure was 13.3%.
In New Mexico and New York, the researchers found plan drop-offs when there is usually plan growth. In New Mexico, there was 0.5% plan growth in 2025, while there was an 8.2% drop-off rate this year. In New York, there was a 0.2% growth rate in 2025 compared to a 3.8% drop-off rate in 2026.
When people do sign up, they pick low-value plans
Enrollment changes aren't just related to overall sign-ups, the Commonwealth Fund researchers added. These changes also include the plan's value, or the metal level.
Notably, Bronze plans, which have lower premiums but high deductibles, saw more signups in 2026. While 29.9% of enrollees selected a Bronze plan last year, 39.6% did so in 2026. Likewise, the number of catastrophic plan signups rose, albeit modestly, from 0.2% to 0.3%.
Mid-tier plans, known as Silver plans, come with higher premiums and lower deductibles and are considered better value. However, the number of people signing up for these plans sank from 56.2% in 2025 to 42.6% in 2026, likely because of the higher premium cost burden.
Paradoxically, the number of people opting for a Gold plan, which comes with the highest premiums but the lowest deductibles, also grew. In 2025, 13.2% of people selected a Gold plan, compared to 17.2% in 2026.
Still, the researchers warned that these trends are only the beginning. Without the enhanced premium subsidies offsetting premium costs, the nation is likely to see a higher uninsured and underinsured rate.
"Coverage losses will likely increase in 2027 as further federal cuts to subsidies and new enrollment barriers take effect," the researchers concluded. "States cannot address coverage losses of this magnitude alone. Congress could take steps to improve affordability by restoring the lapsed enhanced tax credits and removing the red tape surrounding enrollment."
Sara Heath is an executive editor at Xtelligent Healthcare Media, where she covers patient engagement, healthcare policy and health IT.
