Higher Affordable Care Act (ACA) premiums are prompting many Americans to rethink their health insurance. According to Jae Oh, CFP, author of “Maximize Your Medicare,” rising monthly costs, the expiration of enhanced premium tax credits, and expectations of additional premium increases are causing some households to drop marketplace coverage altogether.
The trend could continue into 2027, Oh said in a recent interview, as insurers reassess their participation in ACA exchanges and file for additional premium increases.
For consumers, the challenge is balancing affordability against the financial risk of going uninsured.
What this means for you
- If you buy health insurance through the Affordable Care Act marketplace, expect costs to remain a concern heading into 2027.
- If you’re considering dropping coverage because of rising premiums, understand that switching plans is generally limited to open enrollment or a qualifying life event.
- Before canceling coverage, review whether a lower-cost option or another form of insurance can protect you from potentially devastating medical expenses.
Below is a transcript of the interview with Oh, edited for brevity and clarity.
ACA premiums are forcing some households to drop coverage
Bob Powell: There’s much going on in the world of the Affordable Care Act, as millions of people are dropping their coverage, according to the latest report from KFF. People are looking at their monthly premiums and how much they’ve increased since 2025 and they’re beginning to realize they can’t afford their ACA plan anymore and are dropping it.
Jae Oh: I think this was expected, Bob. You and I spoke at the beginning of this year, and early projections to me looked too good to be true.
Now reality has arrived, where the full financial cost faced by households has become apparent. When you couple that with ongoing, persistent inflation, health coverage became the highest cost they could act upon.
For example, you don’t have a choice but to fill your gas tank to get to work. However, many people have canceled. Almost one out of four people who were enrolled in ACA coverage in 2025 have canceled nationwide for this year.
Consumers should avoid overpaying for coverage they may not use
Bob Powell: You and I have talked in the past about what people in that situation ought to do. Maybe as a recap, share what we’ve talked about on that front.
Jae Oh: What the dramatic price increases have done is highlight the counsel I give to households every day: Do not overpay to begin with.
This was true even prior to the controversies over premium tax credits. It may feel nicer to say, “I have a gold plan” or “I have a platinum plan.” But the reality is that you are front-loading your costs with a 100% probability of paying the carrier.
The candid reality is, when I was 29 or 30 years old, as a male, I went to the doctor once a year at most. In that case, did I need a platinum plan? For a 29- or 30-year-old, that can be almost $4,000 a year, which is a huge amount, especially for people working gig jobs.
They have to come up with this money on a post-tax basis. They do not get the tax deduction that an employer does.
Most consumers cannot switch metal levels midyear
Bob Powell: For folks who didn’t cancel their plan and are in a platinum or gold plan, could they reduce the metal level midyear?
Jae Oh: No, they can’t reduce it midyear. Here is the conundrum: They had through Jan. 15, but now that window has closed.
In order to change your plan, you generally need a change in life situation that qualifies you for a special enrollment period. For example, losing employer-sponsored coverage is a common one. If COBRA ends, that is another common example.
But simply switching from your platinum plan to a bronze plan in July is no longer possible unless you have a very specific reason.
People who canceled coverage may need temporary alternatives
Bob Powell: For folks who canceled, let’s say we’re in June as we record this. They have six months before they can re-enroll in a new plan and maybe think about enrolling in a bronze plan versus a platinum plan, or a catastrophic plan versus a bronze plan.
What do they need to think about? Going without health coverage is really not an option for people.
Jae Oh: It can be worrisome.
Even people who canceled because they are in excellent health, for example, and yet are stretched financially, can look at short-term plans. There are non-ACA-approved plans.
I don’t represent things under the umbrella of health share, which are available nationwide. But there are lower-cost alternatives, which opponents of the ACA have been trying to support during this administration, for sure. That voice has gotten louder.
ACA shoppers may face higher premiums and fewer choices in 2027
Bob Powell: As you think about next year, folks may face increased premiums, as they witnessed this year, but also fewer carriers, right? They may have fewer options to choose from.
Jae Oh: Yes, and it depends on your state.
The situation has become difficult for all stakeholders. We’ve seen this in the past: Carriers can choose to simply not participate because they cannot sustain the cost and the risk.
We have seen large national carriers withdraw, and that is not necessarily a surprise. There are locations where the network system, the health care delivery system, is so fragmented that it’s mind-boggling. For a carrier trying to administer all of them at the same time, it can become untenable. That actually makes complete rational sense.
Another premium increase may be on tap for 2027
Bob Powell: We’ve delivered folks a lot of bad news. Is there any good news or silver lining here?
Jae Oh: First, one more piece of bad news.
During this part of the year, when we speak about Medicare Advantage and the ACA, carriers are proposing what is going to happen going into next year. We get statistics on that as they file with their state regulators.
The news is not good.
When we thought about low double-digit increases going into this year, maybe 10%, 12% or 15%, and then the loss of the premium tax credit, on top of all of that, it looks like midteens increases are very commonly found. And that can be too low in certain locations.
Another dramatic jump in ACA premiums looks to be on tap for 2027.
New ACA plan flexibility may give consumers more choices
Jae Oh: The good news, if you will, is that CMS has relaxed notably the idea of what will be considered an ACA-approved plan.
As a result, it has empowered certain consumers and patients to choose, or cherry-pick, the individual services they deem necessary.
Whether or not that’s wise, I’m not a medical doctor. That was my late father. He would probably not be in favor of patients individually doing the selecting.
Nevertheless, these types of consumer-oriented choices seem to be coming soon in 2027.
The ACA’s future depends on how the risk pool holds together
Bob Powell: Big picture, Jae: As we think about the future of ACA plans, certain segments have long wanted to see the law’s demise. Are we witnessing that, or is there a future for the ACA?
Jae Oh: I think 2027, as it’s currently constructed, does in fact dismantle some of the important components.
What it is showing is that when you cherry-pick certain components you don’t like and retain the things you do like, the No. 1 example is pre-existing conditions. You cannot be denied coverage for a pre-existing condition. Everyone seems to be universally in favor of that.
But if that’s going to be the case, then who is going to be the enrollee? The enrollee will be someone who would not have qualified otherwise. That would logically increase the cost.
When you take away healthy people paying into the system and the overall risk pool, you will see dramatic headlines. This is the ripple effect of stripping away certain aspects of the ACA that opponents did not like.
Adverse selection can drive insurance costs higher
Bob Powell: I think the term of art is adverse selection. No insurer wants that, right?
Jae Oh: Exactly right.
Adverse selection is part of it. And the opponents of the ACA, in their adverse selection of themselves, have tried to pull out the parts they did not like or disagreed with for philosophical or political reasons.
But the math of money ultimately catches up.
Insurance is still a probability-based exercise. If the probability of high cost and high health care usage is high, then the monthly premium will also move accordingly.
Bob Powell: Jae, I assume we’ve covered much, if not all, of what we needed to talk about for now. But if not, you get one last shot at it.
Jae Oh: No, I think that’s quite enough. Delivering enough bad news at one time is overwhelming, even for me.
Bob Powell: And we promised not to shoot the messenger.
Key takeaways
- Nearly one in four ACA enrollees have canceled coverage this year, according to Oh.
- Consumers generally cannot switch marketplace plans midyear unless they qualify for a special enrollment period.
- Additional double-digit premium increases could arrive in 2027, depending on state regulatory approvals.
- Some insurers may continue leaving ACA marketplaces, reducing plan choices in certain states.
- Before canceling health insurance, consumers should compare lower-cost alternatives and understand the financial risks of going without comprehensive coverage.
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