Consumers express concern over rising costs in food and gasoline, yet these increases are minor compared to Affordable Care Act premium hikes. A critical question is emerging about whether it should be called the Unaffordable Care Act.
A Peterson-Kaiser Family Foundation study surveyed 276 health insurers across all states, revealing a median predicted premium increase for 2027 of 15%. Around 90 insurers expect increases between 20% to 35% or higher. This follows a 20% hike in 2026, meaning subscribers may face a 40% to 50% rise over two years.
The Democratic Party and mainstream media frequently attribute these increases to President Trump and Republicans. However, critics argue that Democrats bear much of the responsibility. Since the Affordable Care Act’s inception, warnings about potential premium surges were made clear, foreseeing a decline in insured numbers. Disregarding actuarial predictions, the Democrats aimed to shape insurance as desired.
With the onset of Affordable Care Act’s Open Enrollment, the Kaiser Family Foundation reported on the diminishing number of participants. Between June 2025 and June 2026, enrollment in the individual health insurance market dropped 18%. This market is for those without access to employer-based or government insurance to buy their own plans.
Kaiser anticipates a decrease of approximately 4.6 million users from a total of 20.5 million. The decline coincides with the expiration of enhanced premium tax credits and policy changes aimed at reducing enrollment. As premiums rise, individuals may choose to forgo coverage, much like purchasing less gasoline or food due to increased prices.
This trend mainly affects younger and healthier individuals who find premiums too costly, despite subsidies. Such withdrawals pose economic and actuarial challenges. Insurance pools require healthy individuals’ premiums to cover high healthcare costs of a smaller group who require more services. When younger, healthier people exit, the pool becomes smaller and sicker, pushing premiums higher, leading to further dropouts. This creates a cycle known as the “death spiral.”
The “death spiral” may worsen due to another issue. The Department of Health and Human Services acknowledged fraud, waste, and abuse surrounding the 2026 Open Enrollment Period, estimating 2.6 million improper enrollments, one million of which lack a Social Security number. Removing “phantom enrollees,” those non-existent or duplicatively covered, will end their subsidies, reducing funds to support the sicker remaining population.
This situation may hasten the death spiral. The Democratic Party attributes rising premiums to Republican actions, emphasizing their role in not renewing enhanced subsidies. These temporary enhancements concealed genuine premium costs. Affordable Care Act’s structure and mandates are driving cost increases, not solely subsidy expirations.
The Affordable Care Act initially offered generous subsidies when enacted in March 2010. Subsidies are still present. In 2021, as part of pandemic response, President Biden and Democrats introduced additional temporary subsidies. The reluctance to renew these by Republicans exposed true premium costs.
If these trends persist, the Affordable Care Act could shrink significantly, appealing primarily to the sick, with skyrocketing premiums. What can halt or reverse this decline? Enhanced subsidies might help, but without bipartisan agreement, a solution remains elusive. Should Democrats regain control of Congress and the White House in 2028, additional enhanced subsidies might be introduced. While such subsidies may reduce the insureds’ exodus, it won’t be due to affordability, but to taxpayer contributions covering most costs.
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