4.6 Million Americans Leave Health Insurance Market in Biggest Exodus in a Decade — and Those Staying Face a 15% Rate Hike
The individual health insurance market is shrinking at a pace not seen in a decade, and the insurers left standing are already pricing in the next wave of people walking out the door.
More than 4.6 million Americans left the individual health insurance market in a single year. New research from KFF shows enrollment fell 18%, from 25.2 million in June 2025 to 20.5 million in June 2026. Reuters reports this is the steepest annual decline since 2015. The cause: enhanced premium tax credits ran out, and costs doubled or even tripled for some people.
For those who stayed, Marketplace insurers have proposed a median premium increase of 15% for 2027, the second consecutive year of double-digit increases. About four percentage points of that hike reflects insurers expecting more departures and a sicker risk pool. Insurers are now charging for an exit that hasn’t finished yet. We are seeing the early shape of a death spiral.
Insurers Are Already Pricing In the Next Wave of Departures
Many who left found other coverage. Among 2025 Marketplace enrollees, 22% moved to another coverage source and 9% said they were now uninsured. The people who do drop coverage, though, tend to be the healthier customers who can most easily do without it. When they go, average claims rise. Insurers then raise premiums, and the next level of relatively healthy customers decides coverage is no longer worth the price.
The insurers are reporting exactly that pressure. Centene (NYSE:CNC | CNC Price Prediction) and UnitedHealth Group (NYSE:UNH) have flagged rising medical costs in their Obamacare businesses. This year’s requested median hike of 14% was the second-highest increase in nearly a decade. The enrollment decline is now closing in on the Congressional Budget Office’s projection of roughly a 25% drop through 2026.
Household Budgets Have Little Room Left to Absorb It
A 17% share of returning enrollees told KFF they were not confident they could afford premiums for all of 2026. And they have little margin. The personal savings rate fell to 4.4% in the second quarter, down from 6.9% in early 2024. The University of Michigan consumer sentiment index stood at 51.7 in August.
At the same time, Americans keep spending more on care. Healthcare services spending hit an annualized $3,861.3 billion in August, up from $3,616.9 billion a year earlier. People without coverage tend to put off treatment until conditions get worse, and those costs land later on hospitals as uncompensated care and come back to everyone else through higher prices.
Open Enrollment Will Show Whether the Spiral Takes Hold
KFF warns that more people could become uninsured during the fall Open Enrollment Period, and its figures don’t yet reflect recent plan cancellations. The key signal is the age and health mix of whoever signs up for 2027. If younger enrollees keep leaving faster than older ones, the four-point margin insurers built into their rates will look too small, and 2028 filings will bring a third straight year of double-digit increases. Centene’s and UnitedHealth’s fourth-quarter comments on medical costs in their exchange plans will be the first hard evidence of which way the pool is moving.
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After two decades of patrolling the dark corners of suburbia as a police officer, Rich Duprey hung up his badge and gun to begin writing full time about stocks and investing. For the past 20 years, he’s been cruising the markets looking for companies to lock up as long-term holdings in a portfolio while writing extensively on the broad sectors of consumer goods, technology, and industrials. Because his experience isn’t from the typical financial analyst track, Rich is able to break down complex topics into understandable and useful action points for the average investor. His writings have appeared on The Motley Fool, InvestorPlace, Yahoo! Finance, Money Morning, and, of course, 24/7 Wall St. He has been featured in both U.S. and international publications, including MarketWatch, Financial Times, Forbes, Fast Company, and USA Today.
