Obamacare at Risk of Collapse? Millions of Americans Lose Coverage
The United States health insurance programme, Obamacare, is beginning to lose its appeal. The number of people purchasing insurance through the government health exchange fell to 19.2 million in 2026, from 21.8 million a year earlier. The decline occurred after additional subsidies that had been helping people pay premiums were reduced. The Congressional Budget Office (CBO) estimates that enrolment in the health exchange could fall below 17 million by the end of this year.
The problem is not simply the shrinking number of participants. Those leaving the insurance market tend to be healthier, meaning the remaining pool becomes more expensive to cover. Average premiums have jumped from US$113 to US$178 per month.
Obamacare, or the Affordable Care Act (ACA), was enacted in 2010 to expand access to health insurance, particularly for low- and middle-income people who do not receive coverage through their jobs. One of its main instruments is subsidies for people who buy insurance through health insurance exchanges. However, the requirement to purchase insurance was effectively eliminated in 2019.
Enrolment then surged again after the US Congress increased subsidies in 2021. That policy nearly doubled registration by 2025. Democrats had sought to preserve the additional assistance. However, the extension of the subsidies, estimated to cost around US$35 billion this year, ultimately did not continue. The CBO estimates that marketplace enrolment could fall by up to 10 million people in 2028 compared with last year.
The next problem arises from the composition of participants. Those leaving the insurance exchange tend to be healthier individuals. This means insurance companies now face a pool of participants who on average require more costly care. As the number of healthy participants shrinks, premiums are pushed upward. The average monthly payment this year has risen to US$178, from US$113 previously.
Some participants try to avoid these costs by choosing cheaper insurance plans. As a consequence, the amount they must pay out of pocket before insurance begins covering treatment has also increased by nearly 40% to around US$3,800. As more healthy people choose to leave, the average cost of the remaining pool rises again. This cycle is known as adverse selection.
According to KFF, a health policy think tank, insurance companies are proposing a median premium increase of 15% for 2027. If realised, premiums before subsidies will have risen by more than a third compared with 2025. KFF gives the example of a 40-year-old woman in Indiana with an annual income of US$65,000. In 2025, her monthly premium after subsidies was US$316. This year the figure rose to US$477. Next year, it is expected to approach US$550.
Despite the mounting pressure, the marketplace is not expected to collapse immediately. Ben Sommers, a health economist at Harvard, said the remaining subsidies are likely sufficient to keep some participants enrolled. According to him, the changes essentially return the marketplace closer to the conditions of 2016-2019: a smaller number of participants, fewer participating insurance companies, and a remaining pool that tends to be sicker. The CBO estimates that in 2028 there will be about 10 million fewer Americans obtaining insurance through the marketplace compared with last year.
The problem is that the more people leave the system, the more people are potentially left without health coverage. Research over more than a decade shows that people without insurance tend to delay needed medical treatment, including purchasing certain medicines or undergoing surgery. Hospitals are still required to provide emergency services even if patients cannot pay. As a result, the cost burden can shift to healthcare providers.
According to Kaufman Hall, unpaid healthcare costs rose by an average of 16% in May compared with a year earlier. HCA Healthcare, one of the largest private hospital groups in the US, estimates that the increase in uninsured patients could cut at least US$1 billion from the company’s operating profit this year. That amount is equivalent to about 15% of projected net income.
Obamacare was never a truly universal system. The programme was built on top of an already fragmented US healthcare system, with some people obtaining insurance through their jobs and certain groups covered by government programmes. Because of this, the debate over Medicare-for-all has intensified again among Democrats, including among younger politicians such as Abdul El-Sayed, a Senate candidate from Michigan.
However, the latest data show the problem is more fundamental. When government assistance is reduced, some people do not simply choose a cheaper plan; they choose to leave the insurance market altogether. Cynthia Cox of KFF summarised the issue simply: “People basically want health insurance. The question is just whether they can afford it.”