The health insurance teeter-totter

Increased premiums and the end of enhanced premium tax credits for health insurance plans offered through the Affordable Care Act (ACA) have prompted millions of consumers to downshift to bronze plans with higher out-of-pocket costs, potentially putting them at greater financial risk.

And the risk may intensify as catastrophic health plans become more widely available, with the potential for even larger costs for policyholders, as the Trump administration says it wants to put more choice about healthcare coverage into the hands of consumers.

Although ACA bronze plans and catastrophic plans tend to have lower premiums than other ACA plans, deductibles average $7,500 for bronze plans and $10,600 for catastrophic plans.

“These moves reflect the philosophical commitment of the Trump administration and Congressional Republicans,” says Jonathan Oberlander, Ph.D., a professor of social medicine and a professor of health policy and management at the University of North Carolina at Chapel Hill. “It sort of begs the question — what constitutes health insurance?”

ACA ebbs and flows

ACA enrollment boomed after Congress approved enhanced premium tax credits due to the COVID-19 public health emergency. With the greater availability of such subsidies, enrollment doubled from 12 million in 2021 to more than 24 million last year. Originally, only people earning between 100% and 400% of the federal poverty level were eligible for tax credits to help cover insurance premiums. When those caps were lifted, enrollment soared. Together with Medicaid expansion, enrollment in ACA plans led to all-time lows in the percentage of people without health insurance in 2023.

But after the Republican-controlled Congress failed to extend the larger credits, they ended at the end of 2025. At the same time, healthcare insurance premiums were rising. CMS said that 23.1 million people signed up for coverage through ACA state and federal health insurance exchanges at the beginning of 2026, but people sign up for coverage before they pay the first premium. Research from the Wakley Consulting Group found that almost 15% of enrollees failed to pay their January premiums. More people are expected to not pay the premium when they see the price, and enrollment is projected to fall between 17% and 26% this year.

Before the end of the higher subsidies, some states had uninsured rates below 5%, notes Katherine Hempstead, Ph.D., senior policy officer at the Robert Wood Johnson Foundation. “Now it seems like we’re throwing that into reverse.” Most states have seen enrollment decline, with the steepest drops in North Carolina and Ohio, where enrollment fell by at least 20%. On the other hand, 10 states and the District of Columbia have seen enrollment increases, with New Mexico’s enrollment climbing 18%. It is the only state to have fully replaced enhanced premium tax credits with state funds.

In some cases, individuals who had ACA plans were automatically enrolled in coverage for 2026 but did not pay their premiums when they saw how expensive the premiums were, says Michael Cohen, Ph.D., a principal at Wakely. The number of new consumers signing up for ACA plans was down 13%, which Cohen called “the canary in the coal mine.” He added that “big shifts take multiple years to be fully realized.” Enrollment declines “will continue to get worse during the course of the year,” predicted Hempstead. Although sicker people who use medical services will retain their coverage, it is more likely to be “people not currently using healthcare who will let it go,” Hempstead says.

Already, millions of Americans have switched from silver to bronze ACA plans, which tend to have lower premiums but higher deductibles. For the first time since the ACA exchanges launched in 2014, fewer than half of ACA enrollees selected silver plans. Instead, they chose bronze plans or dropped coverage completely, according to KFF. The number of people enrolled in silver plans fell from 13.7 million, or 57% of enrollees, in 2025, to 9.8 million, or 43% of enrollees, in 2026, according to KFF. At the same time, enrollment in bronze plans jumped from 7.3 million people, or 30% of enrollees, in 2025, to 9.2 million people, or 40% of enrollees, in 2026.

Although many people may opt for bronze plans because of affordability issues, others simply don’t use a lot of healthcare, so for some, a lower-cost bronze plan “suits them. It’s exactly what they need,” says Christina Cousart, director of commercial coverage for the National Academy for State Health Policy.

According to KFF, the average lowest-cost bronze plan was $456 per month in 2026, compared with $381 in 2025. The average lowest-cost silver plan was $611 per month in 2026, compared with $486 in 2025. The average bronze plan deductible was about $7,500, compared to about $5,300 for silver plans. “As the deductible goes up, so do the odds for unpaid bills,” Oberlander observes

Catastrophic plans

The number of people exposed to high healthcare bills may increase further if CMS follows through on expanding access to catastrophic health plans starting in 2027. People have been able to buy catastrophic health insurance on the ACA exchanges, but only if they were younger than 30 or met hardship or affordability criteria. It was positioned as a stopgap measure at best. The Trump administration plans to make the catastrophic plans broadly available in 2027, with terms of up to 10 years. The catastrophic plans would cover the same essential health benefits as other ACA plans and could be paired with a health savings account (HSA) in the same way that high-deductible plans offered by employers are paired with HSAs.

Currently, less than 1% of people are enrolled in catastrophic health plans. “Is this really useful for someone who needs care at all?” asks Kaye Pestaina, director of the Program on Patient and Consumer Protection at KFF. Such plans “impose a level of risk and financial burden most people simply don’t want,” Oberlander says

With high-deductible plans, consumers are likely to have to turn to credit cards, payday loans, or other forms of borrowing to pay their healthcare bills, says Michelle Long, a senior policy manager at KFF. People with catastrophic coverage may skip preventive care or wait until they are sicker to get care, says Hempstead, which will “affect the whole healthcare system.” Pestaina said she expects litigation to be filed over the expansion of access to catastrophic plans.

CMS has also approved “non-network plans” as “qualified health plans” that can be sold on exchanges. Non-network plans do not have contracts with providers. Instead, they use a form of reference pricing, usually tied to what Medicare pays. Members are supposed to shop for services based on posted prices.

Earlier this year, President Donald Trump unveiled a “Great Healthcare Plan” that, among other things, would send healthcare subsidies directly to individuals. But the plan has few details, and no concrete legislative proposal has been advanced. Neither CMS nor the Paragon Health Institute, which has had a role in shaping Republican health policy, responded to requests for comment about the plan. Some Republicans say revamping health insurance to center the buying experience on individuals would reduce overuse of healthcare and help push down prices. “The president clearly has said we need to send money to patients rather than insurers in the system, and building out policies that are consistent with that is important,” Brian Blase, Ph.D., president of the Paragon Health Institute, told Politico recently.

The throughline of GOP plans is a belief that price transparency, market forces and consumer choice can bring down the cost of healthcare. But Long at KFF sees less-regulated health plans and increased market fragmentation. Giving consumers free choice “really expects a lot from consumers who are already confused about this stuff,” says Long. Expecting individuals to shop around and negotiate the price of healthcare services with providers “is a bit fantastical,” she says. “Patients aren’t great consumers,” agrees Oberlander.

Although people are leaving the ACA, the individual market is “too big to fail," says Hempstead. But the changes “could leave the ACA with sicker people, as healthier people are more likely to move on,” Long comments, and that “could increase premiums for those who stay on.”