(TNND) — A recent report indicates that roughly 14% of people enrolled in Affordable Care Act (ACA) plans failed to pay their premiums in January, raising concerns that millions could lose their health insurance soon.
The Centers for Medicare & Medicaid Services has already reported a decline in enrollment in ACA plans for this year.
According to a study by Wakely Consulting Group, which specializes in health actuarial services, 14% of enrollees in 2026 ACA plans did not submit their payments last month.
They do have a grace period—often around three months—to begin making payments before being dropped from their insurance plans.
About 23 million Americans are currently enrolled in ACA plans, either directly or indirectly, via federal or state exchanges, as per CMS.
This figure marks a decrease from last year when just over 24 million people signed up for Obamacare, prior to the expiration of enhanced subsidies that made premiums more affordable.
If the 14% who did not pay their premiums in January remain non-compliant, around 3 million more individuals could lose their health insurance altogether.
Simon Hader, a health policy expert at Ohio State University, estimates that over 6 million people might lose their ACA coverage by year’s end.
“We’re just scratching the surface, but it’s not over yet,” he remarked.
Hader noted that some individuals initially enroll in ACA plans but do not continue making premium payments. There are those who might not want coverage at all but get automatically enrolled, while others might opt out if better insurance options become available through their jobs.
However, Hader expressed concern that 14% seems like a high percentage of non-payers.
He believes this figure could increase as dwindling hopes emerge regarding Congressional action to reinstate enhanced subsidies.
According to actuary Michelle Anderson, who spoke with the Wall Street Journal, there has been a “significant decrease” in the number of people keeping up with their Obamacare premiums lately.
The study also uncovered considerable variation among states in how many individuals paid their first premium in January.
Despite anticipated price hikes, some people might still choose to enroll this year, hoping that expired subsidies could be reinstated later. Others have already paid their premiums this January.
Hader suspects that fewer will maintain payments into February, especially once the shock of higher premiums sinks in.
“Since January, costs have gone up across the board,” he mentioned, referencing gas price increases due to the ongoing war in Iran.
Planning for healthcare coverage could become more tenuous this year, with ongoing disenrollments from non-payment taking time to sort out.
Enhanced subsidies were introduced in 2021 as part of the American Rescue Plan and extended through last year with the 2022 Inflation Control Act.
A KFF estimate suggests that without these enhanced premium tax credits, participants could see their monthly premiums rise by an average of over 114%, while those not receiving subsidies might face an average increase of about 26%.
Wakely’s analysis projects that surging ACA costs could lead to a 17% to 26% drop in enrollment this year.
The analysis also found that a higher number of enrollees are selecting cheaper ACA plans this year.
Healthcare plans are categorized into four types: bronze, silver, gold, and platinum. This year, there has been a notable shift away from the Silver plans, with many opting for the more affordable Bronze option. Enrollment in Bronze plans saw an increase of nearly 11%, whereas Silver plans declined by 17%.
Hader cautioned that while cheaper plans might seem appealing, they often come with lesser coverage and could lead to greater out-of-pocket expenses later on.
“There could be long-term repercussions,” he noted. “You might find yourself less satisfied with your coverage next year if this year’s deductible proves to be unsatisfactory.”
Both Wakely and Hader observed that the demographic landscape seems to be changing, as healthier individuals are increasingly choosing to forgo insurance to save money.
Hader warned that a rise in sick participants could lead to higher premiums for everyone else down the line.
“If you’re dealing with a serious condition like diabetes and need insurance, you’re likely to stick with your plan even if costs rise,” he said.
Yet, this creates further strain on insurance companies because sicker patients tend to utilize more services.
Hader remarked that, at this point, it’s unclear whether insurers have accurately priced this year’s plans given the lower overall health of enrollees.
Insurance companies need to turn a profit, and Hader suggests that premiums could see another increase next year. Some insurers may even choose to leave the market if the economic situation doesn’t improve.
The rising number of uninsured individuals is already impacting hospitals and clinics, with rural providers facing a higher risk of closure.
Before the pandemic, Obamacare enrollment had stabilized at around 10.5 million yearly. However, the subsidies dramatically increased enrollment numbers, as noted by the Pew Research Center.
As the subsidies wind down, Hader anticipates that enrollment could revert to pre-pandemic numbers in the years to come, although he thinks it’s unlikely that enrollment will dip to around 10 million due to population growth.
