The loss of millions of ACA marketplace enrollees will likely force hospitals to confront a growing share of uncompensated care and rising bad debt.
KEY TAKEAWAYS
ACA marketplace enrollment is projected to fall by 21.5% this year after enhanced premium tax credits expired, with more consumers choosing lower-premium, higher-deductible plans.
Hospitals could face growing financial strain from underinsured patients who carry coverage but delay care or struggle to pay large out-of-pocket costs.
The coverage shifts may disrupt payer mix forecasting, value-based care strategies, and revenue cycle performance at a time when hospitals are already navigating elevated costs.
The expiration of enhanced Affordable Care Act (ACA) subsidies is expected to significantly impact the healthcare coverage landscape, and hospital leaders could feel the downstream effects soon.
Analysis from KFF projects ACA marketplace enrollment could fall by 21.5%, or nearly five million people this year, dropping from 22.3 million to about 17.5 million covered lives. At the same time, consumers who remain insured are opting for higher-deductible bronze plans as premiums climb.
For providers, the shift threatens to create more patients who carry insurance, but with deductibles so high that care is often delayed and collections become more difficult.
According to KFF, the average ACA marketplace deductible jumped 37% year-over-year, increasing from $2,759 in 2025 to $3,786 in 2026, marking the largest increase in marketplace history. Bronze plan enrollment climbed from 30% to 40% of all marketplace selections, while silver plan enrollment dropped from 57% to a record-low 43%.
The enrollment decline largely stems from the expiration of enhanced premium tax credits that had expanded affordability and helped drive marketplace enrollment to record highs over the last several years. KFF estimated that average monthly premium payments rose 58% from $113 to $178 after the subsidies expired.
That fluctuation in affordability could meaningfully change hospital utilization patterns.
Patients facing higher out-of-pocket exposure often postpone elective procedures or avoid preventive services altogether until their conditions worsen. For hospitals already contending with thin margins and persistent costs, a growing population of underinsured patients could create additional pressure on revenue cycles and charity care programs.
The impact could particularly be felt for hospitals serving middle-income populations that previously benefited from expanded subsidies. KFF found that individuals above 400% of the federal poverty level, or the “subsidy cliff” population, accounted for nearly half (48%) of the decline in marketplace plan selections despite representing just 7% of 2025 enrollment.
Hospitals in states that experienced rapid ACA marketplace growth during the enhanced-subsidy era may see the biggest disruption. KFF identified 41 states with enrollment drops, with the largest seen in North Carolina (22%), Ohio (20%), West Virginia (17%), and Indiana, Delaware, and Arizona (all 16%).
The trend could also affect strategic priorities for health system executives, particularly around population health management and value-based care models that depend on stable insurance coverage and consistent patient engagement.
If marketplace depletion continues through the rest of the year, especially as consumers fail to keep up with higher premium payments, hospitals may need to revisit forecasting models tied to payer mix, utilization, and uncompensated care.
KFF noted that effectuated enrollment, which measures consumers who pay their premiums and maintain coverage, could decline between 17% and 26% this year due to midyear attrition and unpaid premiums, based on estimates from Wakely Consulting Group.
As a result, hospitals may invest more in front-end financial screening or Medicaid enrollment assistance and community outreach efforts aimed at preserving coverage continuity.
The concern for hospital leaders is that the coverage shifts come at a time when many organizations are already operating with limited financial flexibility. While hospitals have shown signs of improved operational discipline, many organizations continue to struggle with elevated expenses. Kaufman Hall’s latest National Hospital Flash Report for March found that bad debt and charity per calendar day was up 18% year-over-year, partly offsetting financial progress.
HENRY KOTULA 