2026 ACA Reality Check: What Benefit Consultants Need to Reassess Now

The ACA has weathered policy shocks before. But heading into 2026, benefit consultants had real reasons to reassess: enhanced subsidies were expiring, carriers were warning of adverse selection, and median proposed rate increases were sitting around 18%. Here's a look at how rates actually get set, what the market feared, what really happened, and what benefit consultants need to watch heading into 2027.

How ACA insurance rates are set

Understanding ACA rates starts with understanding the timeline. Each spring, insurers develop rate proposals based on claims data and cost projections. By early summer, those proposals are filed with state Departments of Insurance and/or CMS. Regulators then spend the summer reviewing filings, requesting changes, and approving final rates, which are published in October before Open Enrollment begins. The new plan year kicks off in January.

The rate development process itself involves four key steps:

1. Insurers project medical and drug costs, utilization, and risk mix

2. They file those rates with actuarial justification

3. State or federal regulators review to ensure rates are adequate, not excessive, and not discriminatory

4. Results are posted publicly, particularly for increases above 15%

What regulators are ultimately reviewing is a snapshot of market conditions at a specific moment in time. And those conditions can shift significantly from year to year depending on several forces including:

• The health of the risk pool (younger versus older enrollees)

• Medical inflation and provider reimbursement trends

• Prescription drug costs and the innovation pipeline

• Federal or state policy changes including subsidies, reinsurance, and market rules

The ACA enrollment concerns heading into 2026

The concerns going into 2026 were significant and came from multiple directions. Several converging forces were pushing rates toward a roughly 18% average increase, the largest proposed increases since 2018.

The biggest driver was rising base healthcare costs. Ongoing medical inflation, higher labor costs, provider consolidation, and overall utilization increases contributed an estimated 6 to 7 percentage points to that figure, accounting for roughly 35%-40% of the total increase.

Specialty drug costs came in as the second largest factor, adding approximately 4 percentage points. High-cost medications like GLP-1s for weight loss and diabetes saw significant increases in both utilization and cost, making them a notable line item in insurer projections.

The expiration of enhanced Premium Tax Credits added another 4 percentage points on its own. The enhanced PTCs, created during COVID and extended through 2025, expired at the end of that year, reverting the ACA to its original subsidy structure. Without them, the average annual premium for subsidized Marketplace enrollees was projected to increase by over 100%, from roughly $888 to approximately $1,904. Congress debated extending the subsidies but failed to reach a deal before they expired.

Risk pool deterioration and adverse selection effects contributed roughly 2 additional percentage points. As costs rose, healthier consumers were more likely to drop coverage, raising the average risk level across the pool and pushing premiums higher still. Carriers flagged this dynamic as a key concern heading into the year.

Rounding out the picture, tariffs, regulatory uncertainty, and increased risk margins contributed a modest 1 to 2 percentage points. Policy analysts estimated that 4 to 5 million people could become uninsured as a result of these combined pressures.

What really happened: Actual outcomes in 2026

The market proved more resilient than many had anticipated. 

Enrollment did decline, but the drop was meaningfully smaller than projected. While analysts had estimated 4 to 5 million people could lose coverage, the actual figure came in around 1.2 million, about 5% of Marketplace enrollment, before grace period cancellations. Middle-income consumers, particularly those above the original ACA subsidy thresholds, felt the affordability pressure most directly and faced the largest premium increases.

Rather than exiting the market entirely, many consumers made pragmatic adjustments. Shifting to Bronze plans or accepting higher deductibles allowed households to maintain coverage while managing monthly costs. Carrier participation followed a similar pattern of resilience: most insurers remained in the Marketplace, adjusting their pricing to reflect the new risk environment rather than withdrawing from it.

The lingering question as 2026 continues is the risk pool. Whether healthier enrollees will continue to exit over time, and what that would mean for future premium trajectories, is something both policymakers and insurers are monitoring closely.

Looking ahead to 2027: ACA marketplace changes

The 2026 experience echoes a familiar pattern. After the 2018 policy shock, when federal Cost-Sharing Reduction payments were eliminated and benchmark premiums spiked 27%-34% nationally, the ACA market corrected quickly. Insurers priced conservatively, financial performance improved, and premium growth slowed. Enrollment held around 11 to 12 million. The market proved more resilient than the headlines suggested.

For 2027, there are three plausible scenarios:

In the optimistic scenario, Marketplace enrollment stabilizes following the subsidy shock, premium growth flattens or even declines in markets that were over-inflated by uncertainty, and carriers remain broadly committed to the exchanges.

The moderate scenario, considered most likely, involves premiums increasing 5%-10% annually roughly in line with medical inflation, some continued consumer buy-down to lower-metal plans, and carrier participation remaining stable but more selective by region.

The pessimistic scenario involves loss of healthier enrollees worsening the risk pool, premium increases accelerating above medical inflation, some insurer pullback from exchanges, and coverage becoming increasingly unaffordable for unsubsidized consumers.

Several proposed rule changes are also shaping the 2027 landscape. On plan design and coverage, proposed changes include eliminating standardized plan requirements, allowing more non-standard plan options, expanding catastrophic plans with multi-year contracts up to 10 years, and potentially expanding non-network reimbursement-based plans. On marketplace structure, a shorter open enrollment period is proposed starting in 2027, along with removal of some special enrollment periods and stricter eligibility verification for subsidies. Benefit design changes may include lower actuarial value plans, updates to Bronze and catastrophic cost-sharing rules, and potential changes to Essential Health Benefit classifications. States would also gain greater flexibility to operate or modify their exchanges under looser network adequacy standards.

On the legislative side, the policy with the highest near-term likelihood of passage is PBM Reform (roughly 70% likelihood), which would slightly increase ACA premiums but improve prescription drug coverage, a net neutral outcome. CSR payment restoration (roughly 50% likelihood) would reduce all ACA premiums by approximately 10%, a very positive development. Extended tax credits and the CHOICE Act each carry roughly 10% odds but would meaningfully grow the ACA market if passed.

The bottom line for benefit consultants: the ACA proved its durability in 2026. The question for 2027 is not whether the market will survive, but how advisors position their clients within a more volatile, more price-sensitive landscape.

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