Millions drop Obamacare after Trump-backed subsidy rollback sends premiums soaring

More than five million Americans have dropped Affordable Care Act (ACA), or Obamacare, health insurance plans after enhanced federal subsidies expired, leading to sharp increases in premium costs and reigniting a political battle over former President Barack Obama's signature healthcare law.New data released by the US Department of Health and Human Services (HHS) on Friday showed that 19.2 million people remain enrolled in ACA marketplace plans for 2026. That is down from a record 24.2 million enrolled in 2025, with over one million fewer people selecting plans during open enrollment and another four million later dropping coverage or failing to pay premiums.The steep decline follows the expiration of enhanced premium tax credits after President Donald Trump and Republicans in Congress declined to extend the subsidies introduced during the Covid-19 pandemic under the Biden administration. Democrats had sought to preserve the financial assistance and even shut down the federal government in October 2025 during negotiations over extending the programme.The Affordable Care Act, widely known as Obamacare after former President Barack Obama, dramatically expanded health insurance coverage after its passage in 2010. Supporters say the temporary enhanced subsidies made coverage affordable for millions, while Republicans and the Trump administration have argued that the programme became vulnerable to fraud and improper enrollments.According to HHS, current enrollment stands at 19.2 million. The department's report also highlighted concerns over fraudulent and improper enrollments, saying Trump administration efforts were reducing such cases.However, several health policy experts attributed the decline primarily to soaring insurance costs rather than fraud."The main takeaway is that enrollment is down 13% from last year," explained Cynthia Cox, director of KFF's Program on the ACA. "While the Trump administration attributes this drop in enrollment to their attempts to address fraud, this coverage loss happened at the same time millions of people faced double or even triple digit increases in their premium payments with the expiration of enhanced tax credits."Health policy experts said enrollment had surged between 2021 and 2025 because enhanced subsidies substantially reduced premium costs."The marketplace doubled in size during the period when there were enhanced subsidies because the coverage was much more affordable and much more appealing to people," Cox said.Average premium costs have roughly doubled between 2025 and 2026 after the enhanced tax credits expired, prompting many consumers to leave the marketplace."When their costs went up, many of them dropped their coverage," Cox said.The Trump administration has pointed to fraud as a major reason behind the earlier surge in Obamacare enrollment, citing arguments advanced by the conservative Paragon Health Institute. Many independent healthcare experts, however, dispute that explanation."I don't see data that point to that conclusion that a 5 million person drop can be explained by allegations of fraud," said Stacey Pogue, senior research fellow at the Georgetown Center on Health Insurance Reforms. "There's lots of evidence pointing to people making decisions based on what they can pay each month."Experts said higher premiums have also created challenges for insurers. Several companies, including Cigna, have announced plans to withdraw from ACA marketplaces in some areas, raising concerns over reduced competition and higher prices."If there are fewer customers, then that makes the market less appealing to insurance companies," Cox said.She said healthier individuals are more likely to drop coverage, which could weaken insurance markets over time. However, she does not believe the marketplaces are currently at risk of entering a so-called "death spiral.""I think there are still enough people buying ACA marketplace coverage and that's going to keep these markets working," she said. "At this point, we don't see any parts of the country that are at risk of having no insurance company. If that were to happen, that would be what a death spiral might look like."Early insurance filings for 2027 indicate premiums are likely to rise again next year, suggesting enrollment could continue to decline unless Congress revisits financial assistance for ACA policyholders.The issue is expected to become a major healthcare debate ahead of the November midterm elections, with Democrats blaming Republicans and the Trump administration for allowing subsidies to lapse, while the administration maintains its crackdown on fraud is improving the integrity of the Obamacare marketplace.Catch the latest world news and top headlines. Download the TOI App.