A Breaking Point: When Insurance Costs More Than You Can Afford
How record-high premiums, exploding deductibles, and the end of ACA subsidies are forcing millions of Americans to make impossible choices — and what comes next.
Something shifted in 2026. For the first time in years, fewer Americans enrolled in Affordable Care Act marketplace plans — not because fewer people needed coverage, but because millions could no longer afford it. The enhanced subsidies that had kept premiums manageable for nearly five years expired at the end of 2025, triggering a cost shock that health economists had warned about for months.
The result is a quiet crisis playing out in kitchen table conversations across the country: families calculating whether to pay a monthly premium or the electric bill, self-employed workers weighing catastrophic coverage against going bare, young adults aging off their parents’ plans into a market where the math no longer adds up. This is the first post in a series examining these choices — who is affected, what the real costs are, and what alternatives people are actually turning to.
The Tide Shifts: 2026 Open Enrollment
The numbers from the 2026 open enrollment period tell a stark story. CMS reported approximately 22.8 million sign-ups for 2026 — a drop of roughly 1.5 million from the 24.3 million who enrolled in 2025. New customers fell from about 3.1 million to 2.8 million. After years of consistent growth driven by generous federal subsidies — from 11 million in 2020 to a record 24 million in 2025 — marketplace enrollment declined for the first time in years.
But that headline figure may understate the full impact. Plan selections are not the same as activated coverage: many enrollees are auto-renewed and may not pay their first premium when they see the new cost. The Urban Institute projects that 4.8 million people will become uninsured in 2026 as a direct result of the subsidy expiration, and that 7.3 million fewer people will receive subsidized marketplace coverage compared to a scenario in which the enhanced credits had been extended. Young adults aged 19–34 account for nearly half of the projected increase in uninsured. An additional 2.5 million are expected to drop ACA coverage but find alternatives such as employer-sponsored insurance or Medicaid. The full enrollment picture won’t be clear until CMS releases effectuated enrollment data in mid-2026.
The Real Cost of Coverage: Premiums Plus Out-of-Pocket
A common mistake in any discussion of health insurance is focusing on premiums alone. For most families, the true cost of coverage — what they actually spend in a year — is the premium plus whatever they pay out-of-pocket before and after the deductible kicks in. When you combine these, the picture becomes considerably more alarming.
The Premium Shock to Marketplace Plans
For marketplace enrollees, the expiration of enhanced ACA subsidies hit like a wall. KFF estimates that premiums for subsidized enrollees more than doubled on average:
Average annual premium for subsidized enrollees rose from $888 to $1,904 — a 114% increase. (KFF, 2025) Note: this reflects the net after remaining base subsidies; unsubsidized enrollees pay more.
For lower-income consumers (under 250% of the federal poverty level), net monthly premiums are projected to rise from $169 to $919 per month. Fourfold increases in a single year.
For enrollees above 400% of the federal poverty level, the returning “subsidy cliff” means full-price premiums. For a 60-year-old couple earning $85,000, KFF estimates annual premiums would rise by over $22,600, bringing their benchmark plan cost to roughly a quarter of their income.
Gross premiums rose an estimated 26% nationally for 2026, with 4 percentage points of that driven by insurers anticipating a sicker pool as healthier enrollees drop coverage — a dynamic that can become self-reinforcing.
For Employer-Covered Workers: Rising Costs, Shifting Burden
Those with employer-sponsored coverage are not insulated. Employer-sponsored insurance covers 154 million Americans under 65, but costs are accelerating:
Average family premiums reached $26,993 in 2025 — a 6% increase, following increases of 7% in each of the two prior years. Workers contributed an average of $6,850 toward family coverage. (KFF Employer Health Benefits Survey, 2025)
For single coverage, workers contributed an average of $1,440, with total annual single premiums averaging $9,325. Both premium growth rates exceeded inflation (2.7%) and wage growth (4%).
36% of large employers cited prescription drug prices as contributing “a great deal” to premium increases, with GLP-1 weight-loss medications a significant driver.
Early estimates suggest another 6%+ employer premium increase is likely for 2026, potentially the first three-year stretch of 6%+ consecutive increases in two decades.
Out-of-Pocket Costs: The Hidden Burden
Premiums are only part of the equation. Even with coverage, most insured Americans face deductibles, copays, and coinsurance before their plan meaningfully pays. And in 2026, those thresholds jumped significantly:
The average deductible for workers with employer-sponsored single coverage was $1,886 in 2025 — up 17% over five years and 43% over the past decade. Workers at small firms face higher deductibles, averaging $2,631. (KFF, 2025)
34% of covered workers are in plans with a deductible of at least $2,000 for single coverage, up 32% over five years.
For ACA marketplace plans in 2026: silver plan deductibles average $5,304; bronze plan deductibles average $7,476. (The 2025 average across all marketplace plans was $2,789 — the dramatic jump for 2026 reflects many enrollees being pushed from silver to bronze tiers by rising premiums.) (KFF/Peterson, 2026)
The ACA’s out-of-pocket maximum — the most a person can spend on covered in-network care in a year — rose to $10,600 for individuals and $21,200 for families in 2026, up from $9,200 and $18,400 in 2025.
21% of workers with employer coverage face an out-of-pocket maximum above $6,000 for single coverage. (KFF Employer Survey, 2025)
Who Is Most Affected
The burden of rising costs falls unevenly. While virtually all Americans with health coverage face higher costs, certain groups are disproportionately affected:
Young adults (19–34) are the most likely to drop coverage when costs rise, accounting for nearly half of projected 2026 coverage loss. They tend to be healthier and are more likely to calculate that premiums exceed expected benefits.
Self-employed individuals and gig workers, who lack access to employer-sponsored coverage and must buy directly on the individual market — often at unsubsidized rates.
Lower-income individuals who fall in the gap between Medicaid eligibility and meaningful subsidy thresholds, or who live in states that have not expanded Medicaid.
Residents of high-cost states. North Carolina saw sign-ups fall nearly 22% in 2026; Pennsylvania saw plan terminations more than triple. Meanwhile New Mexico, which used state funds to offset lost federal subsidies, saw enrollment hold flat. The uninsured rate nationally ranges from 3% in Massachusetts to 18.6% in Texas.
Adults aged 50–64 face extreme premium-to-income pressure: this group’s premiums are the highest of any age cohort, yet they are too young for Medicare.
The Imperfect Choices People Are Left With
As costs have mounted, Americans have begun navigating a landscape of alternatives — some structured and regulated, others informal and risky. Each represents a different calculation about risk tolerance, health needs, and financial capacity. The following options form the basis for deeper exploration in future posts in this series.
1. Stay Enrolled in Traditional Coverage — and Absorb the Cost
For many, the baseline remains employer-sponsored or marketplace coverage despite the cost. The protection against catastrophic medical events — a hospitalization, a cancer diagnosis, a surgical emergency — still makes coverage the rational choice for most people with moderate or elevated health risk. The challenge is that “staying enrolled” increasingly means accepting a deductible that functions as near-self-insurance for routine and moderate care, particularly for bronze plans with deductibles approaching $7,500.
2. High-Deductible Health Plan (HDHP) + Health Savings Account (HSA)
A widely used cost-reduction strategy within traditional insurance, HDHPs carry lower premiums in exchange for higher deductibles ($1,700+ for individuals in 2026). Paired with an HSA — a tax-advantaged account for qualified medical expenses — this approach lets healthier individuals reduce monthly premiums while setting aside pre-tax funds for care. Beginning in 2026, all bronze and catastrophic ACA marketplace plans are now HSA-eligible, expanding access to this strategy (Working Families Tax Cuts legislation, 2025). The trade-off: individuals must have cash reserves to cover the deductible when care is needed.
3. Direct Primary Care (DPC) Membership
Direct Primary Care bypasses insurance entirely for primary and preventive care, replacing it with a flat monthly subscription ($50–$150/month) for unlimited access to a primary care physician. Appointments tend to be longer, same-day access is common, and lab work and generic medications are often available at dramatically reduced cost. The significant limitation: DPC does not cover emergencies, hospitalizations, specialist care, or major procedures. Most DPC patients combine membership with a catastrophic or high-deductible plan to cover those risks. Future post: a deep dive into whether DPC + catastrophic coverage can be a viable full-coverage substitute.
4. Health Care Sharing Ministries (HCSMs)
Health care sharing ministries are not insurance. They are member-funded organizations, typically faith-based, in which members contribute monthly to a shared pool that covers one another’s medical expenses. Monthly contributions tend to run lower than unsubsidized insurance premiums. As of 2024, 107 HCSMs were federally certified. The critical caveat: these organizations carry no legal obligation to pay claims. Members share costs voluntarily, coverage is typically limited to members who align with the ministry’s faith-based requirements, and pre-existing conditions may be excluded or capped. They represent a bet on community solidarity rather than contractual protection. Future post: what HCSM coverage actually looks like in practice — and when it falls short.
5. Going Uninsured
For an estimated 27 million Americans, going without any coverage is the current reality. Some arrive there by choice — primarily younger, healthier individuals who calculate their premium costs exceed their expected healthcare use. Most arrive by circumstance: priced out of the market, ineligible for subsidies, or caught between Medicaid and affordability. Options exist for the uninsured: federally qualified health centers offer sliding-scale primary care, hospitals are required to provide emergency care and many have charity care programs, and pharmaceutical patient assistance programs can offset medication costs. But uninsured individuals face dramatically higher prices for care, are more likely to delay treatment, and carry higher rates of medical debt. Future post: navigating healthcare without coverage — what resources exist and what the true costs look like.
6. Medical Tourism and International Care
A small but growing segment of Americans — particularly those facing elective procedures or predictable, high-cost care — are looking internationally. Countries like Mexico, Costa Rica, Thailand, and Portugal offer medical services at a fraction of U.S. prices, sometimes at total costs below domestic out-of-pocket expenses even including travel. This approach remains niche, better suited to planned procedures than acute or emergency care, and carries risks around care coordination, follow-up, and legal recourse. But for some, the math is compelling.
Looking Ahead: 2027 Open Enrollment and Beyond
The 2026 open enrollment period may prove to be a preview of a larger structural shift. Several forces are converging that suggest the pressure on coverage decisions will intensify, not ease:
Early state-level data from 2026 points to an acceleration of policy cancellations and non-payment as enrollees receive their first bills — in Idaho, Massachusetts, and Virginia, plan terminations roughly doubled versus the same point a year earlier. In Pennsylvania, terminations tripled. Many of these drops won’t show up in official data until mid-2026.
Employer premiums are expected to increase again in 2026, following three consecutive years of 6–07% growth. Insurers have filed double-digit proposed increases in the small-group and individual markets, potentially foreshadowing large-group increases in 2027.
The adverse selection dynamic in the individual market — where healthier enrollees drop coverage, pushing premiums higher for those who remain — could accelerate as 2026 effectuated data becomes available and insurers set 2027 rates.
The CBO estimated in December 2024 that not extending the enhanced subsidies would cause 2.2 million people to lose insurance in 2026, with further increases in following years. With no legislative fix yet enacted, 2027 may see additional coverage erosion.
KFF data suggests that if marketplace premiums doubled, approximately 1 in 4 current enrollees would “very likely” go without insurance — a threshold already crossed or approaching for many demographic groups.
What 2027 open enrollment looks like will depend in part on how insurers respond to the sicker risk pool taking shape in 2026, how many people who dropped coverage return, and whether any legislative action restores subsidy support. Absent those changes, the trajectory points toward a continued rise in the uninsured and underinsured — and a continued expansion of the alternatives market.
About This Series
This post is the first in an ongoing series examining how Americans are navigating healthcare costs and coverage decisions. Upcoming posts will take a deeper look at each option outlined above: the real math behind HDHPs and HSAs, how Direct Primary Care works and where it falls short, what life looks like navigating care without insurance, and a close examination of health care sharing ministries — including the risks that don’t always appear in the brochure.
Sources
1. KFF. “2025 Employer Health Benefits Survey.” Kaiser Family Foundation, October 22, 2025. https://www.kff.org/health-costs/2025-employer-health-benefits-survey/
Source for: family premium $26,993; single premium $9,325; worker family contribution $6,850; worker single contribution $1,440; avg. single deductible $1,886; small-firm avg. deductible $2,631; 34% of workers with deductible $2,000+; 21% with OOP max above $6,000; GLP-1 drug coverage data.
2. KFF. “ACA Marketplace Premium Payments Would More Than Double on Average Next Year if Enhanced Premium Tax Credits Expire.” Kaiser Family Foundation, September 30, 2025. https://www.kff.org/affordable-care-act/aca-marketplace-premium-payments-would-more-than-double-on-average-next-year-if-enhanced-premium-tax-credits-expire/
Source for: 114% average subsidized premium increase; lower-income enrollees from $169 to $919/month; $22,600 increase for 60-year-old couple at $85,000 income.
3. KFF. “ACA Insurers Are Raising Premiums by an Estimated 26%, but Most Enrollees Could See Sharper Increases in What They Pay.” Kaiser Family Foundation Quick Takes, October 29, 2025. https://www.kff.org/quick-take/aca-insurers-are-raising-premiums-by-an-estimated-26-but-most-enrollees-could-see-sharper-increases-in-what-they-pay/
Source for: 26% average gross insurer premium increase for 2026; 4 percentage points attributed to anticipated adverse selection from healthier enrollees dropping coverage.
4. KFF. “Deductibles in ACA Marketplace Plans, 2014–2026.” Kaiser Family Foundation, November 6, 2025. https://www.kff.org/affordable-care-act/deductibles-in-aca-marketplace-plans/
Source for: 2026 silver plan avg. deductible $5,304; bronze plan avg. deductible $7,476; 2025 cross-plan average $2,789.
5. KFF. “Policy Changes Bring Renewed Focus on High-Deductible Health Plans.” Kaiser Family Foundation, January 5, 2026. https://www.kff.org/patient-consumer-protections/policy-changes-bring-renewed-focus-on-high-deductible-health-plans/
Source for: catastrophic plan deductible equals OOP max ($10,600 individual / $21,200 family in 2026); HSA eligibility expansion to all bronze and catastrophic plans under Working Families Tax Cuts legislation.
6. KFF. “8 Things to Watch for the 2026 ACA Open Enrollment Period.” Kaiser Family Foundation, October 28, 2025. https://www.kff.org/affordable-care-act/8-things-to-watch-for-the-2026-aca-open-enrollment-period/
Source for: 2026 OOP max of $10,600 individual / $21,200 family; HSA eligibility changes; tax credit repayment rule changes; subsidy cliff mechanics.
7. KFF. “Higher Premium Payments or Higher Deductibles: The Tradeoffs ACA Enrollees Face.” Peterson-KFF Health System Tracker, January 14, 2026. https://www.kff.org/health-costs/higher-premium-payments-or-higher-deductibles-the-tradeoffs-aca-enrollees-face/
Source for: silver-to-bronze plan tradeoff analysis; impact on cost-sharing reductions for lower-income enrollees.
8. KFF. “ACA Sign-Ups Are Down by Over a Million People, But It’s Still an Incomplete Picture.” Kaiser Family Foundation Quick Takes, January 29, 2026. https://www.kff.org/quick-take/aca-signups-are-down-but-still-an-incomplete-picture/
Source for: ~23M total 2026 sign-ups (semifinal); down 1.2–1.3M vs. same point in 2025; analysis of effectuation uncertainty and auto-renewal dynamics.
9. KFF. “2025 KFF Marketplace Enrollees Survey.” Kaiser Family Foundation, December 4, 2025. https://www.kff.org/public-opinion/2025-kff-marketplace-enrollees-survey/
Source for: 1 in 4 (25%) of enrollees say they would “very likely” go uninsured if premiums doubled; 32% would shop for a lower-premium/higher-deductible plan.
10. KFF. “Mapping the Uneven Burden of Rising ACA Marketplace Premium Payments due to Enhanced Tax Credit Expiration.” Kaiser Family Foundation, December 5, 2025. https://www.kff.org/affordable-care-act/mapping-the-uneven-burden-of-rising-aca-marketplace-premium-payments-due-to-enhanced-tax-credit-expiration/
Source for: state-level variation in subsidy expiration impact; income-level premium increase maps; impact on enrollees above 400% FPL.
11. Buettgens, Matthew, Michael Simpson, Jason Levitis, Fernando Hernandez-Lepe, and Jessica Banthin. “4.8 Million People Will Lose Coverage in 2026 If Enhanced Premium Tax Credits Expire.” Urban Institute, September 2025. https://www.urban.org/research/publication/48-million-people-will-lose-coverage-2026-if-enhanced-premium-tax-credits
Source for: 4.8M projected uninsured increase; 7.3M fewer subsidized marketplace enrollees vs. extended-subsidy scenario; 2.5M finding alternative coverage; lower-income premium increase from $169 to $919/month.
12. Holahan, John, Michael Simpson, and Erik Wengle. “Understanding the Extraordinary Increase in ACA Premiums in 2026.” Urban Institute, December 18, 2025. https://www.urban.org/research/publication/understanding-extraordinary-increase-aca-premiums-2026
Source for: 21.7% average gross premium increase context; 2020–2025 average of 2.0% per year for comparison; insurer participation changes; adverse selection dynamics.
13. Centers for Medicare & Medicaid Services (CMS). “Marketplace 2026 Open Enrollment Period Report: National Snapshot.” U.S. Department of Health & Human Services, January 2026. https://www.cms.gov/newsroom/fact-sheets/marketplace-2026-open-enrollment-period-report-national-snapshot-2
Source for: 23.0M semifinal 2026 plan selections; 3.4M new enrollees; 19.6M returning/auto-renewed; state-level enrollment data.
14. Centers for Medicare & Medicaid Services (CMS). “Marketplace 2026 Open Enrollment Fact Sheet.” U.S. Department of Health & Human Services, 2025. https://www.cms.gov/files/document/fact-sheet-marketplace-2026-open-enrollment.pdf
Source for: HSA expansion to bronze and catastrophic plans under Working Families Tax Cuts legislation; 2026 enrollment period rules.
15. Congressional Budget Office. “Health Insurance Coverage Projections for the U.S. Population and Sources of Coverage.” CBO, March 2024 (updated estimates cited in policy analysis through 2024–2025). https://www.cbo.gov/publication/59273
Source for: projection that not extending enhanced subsidies would cause 2.2M to lose insurance in 2026, with further increases in subsequent years.
16. ACA Signups (Charles Gaba). “Breaking: CMS Posts Semifinal 2026 Open Enrollment Report: 23.0M QHPs, Down ~1.3M.” ACASignups.net, January 28, 2026. https://acasignups.net/26/01/28/breaking-cms-posts-semifinal-2026-open-enrollment-report-230m-qhps-down-only-13m
Source for: year-over-year enrollment comparisons by state and platform; new vs. returning enrollee breakdown; state-specific drops (North Carolina −21%, New Mexico +19.5%).