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As the 2026 Affordable Care Act (ACA) Marketplace open enrollment period nears its close鈥攁nd with enhanced subsidies expiring, rates shifting, and consumer behavior evolving鈥攓uestions about enrollment stability, affordability, and operational readiness have rapidly moved to the forefront. Andrea Maresca, Senior Principal, at 红领巾瓜报, caught up with Zach Sherman, Managing Director for Coverage Policy and Program Design at 红领巾瓜报, and , PhD, who leads much of the federal policy analysis advanced by Wakely, an 红领巾瓜报 company, to unpack what they鈥檙e seeing so far.

Q: This year鈥檚 open enrollment period has been unusually complex. At the federal level, what stands out most so far? 

Michael: The headline is that new enrollment is down sharply, while returning consumers have held steadier than expected. That reflects the reality that the enhanced subsidies are gone, premiums have risen, and consumers are facing higher net costs across nearly every market. 

But nuance matters: The real question now is how many of these plan selections will effectuate鈥攎eaning consumers pay their first month premium, and how many will stay enrolled the entire year? Average effectuated enrollment throughout the year is what truly determines 2026 risk mix and market stability. 

Q: Enrollment appears to vary considerably from state to state. What are you hearing from state partners? 

Zach: It鈥檚 a tale of two markets. StateBased Exchanges (SBEs) are generally seeing less attrition and, in some cases, even modest increases in plan selections. The reason is simple: Many states are doing a lot of heavy lifting to offset the loss of federal support. 

For example, SBEs perform earlier and have more customized outreach. We鈥檝e also seen some states step in and offer state-funded subsidies, which are cushioning the affordability loss in places like New Mexico, Maryland, and California. 

While still early, the data suggest that states with heavy investment in awareness and enrollment assistance, operational support, and affordability are weathering the transition better because they have more tools to stabilize the consumer experience. 

Q: There鈥檚 been a lot of speculation about how consumers are responding to the end of enhanced subsidies. What are the early signs? 

Michael: Consumers appear to be buying leaner benefits or different metal tiers to manage premium increases. 

Another underrecognized but incredibly important dynamic is that autoreenrolled consumers may not effectuate coverage once they see the final outofpocket premium. That dynamic won鈥檛 be fully understood until March, April, and even May. 

Q: Idaho is a particularly interesting early case study. What are you learning from the first state to complete enrollment? 

Zach: Your Health Idaho鈥檚 open enrollment finished on December 15, and while they saw a slight increase in plan selections, state officials are not celebrating as they expect a large wave of cancellations鈥攗p to 20,000鈥攄ue to the expiring subsidies. 

That鈥檚 the clearest early indication that affordability is the defining issue of 2026. States are preparing for higher-than-usual enrollment attrition in quarters one and two (Q1 and Q2), and they鈥檙e thinking hard about customer service capacity as consumers navigate changing net premiums, increased deductibles and out-of-pocket costs, and nonpayment grace periods. 

Q: Are there policy levers states can still pull to mitigate affordability challenges going forward? 

Zach: We鈥檙e seeing states explore options for mitigating affordability gaps and enrollment losses, including through state subsidy programs and increased investment in existing reinsurance programs. SBEs are also leaning on their core competencies鈥攖ailored and specific education campaigns and enrollment and plan comparison tools鈥攖o help their customers cut through the noise and navigate to the best option within their budget.  

These aren鈥檛 perfect or quick fixes and most states don鈥檛 have the resources necessary to backstop the expiring subsidies, but state leaders increasingly view doing something as necessary to stabilize their markets. 

Q: What should health plans, exchanges, and policymakers watch most closely over the next three months? 

Michael: Effectuation, effectuation, effectuation. The composition of the effectuated population will define 2026 risk. 

Zach: Agree. In addition, future regulatory action on affordability, eligibility and enrollment processes, and program integrity. The federal government is expected to issue its annual payment notice, the proposed 2027 Notice of Benefits and Payment Parameters, in the near future. 

You can find more insights on the initial enrollment patterns to date in this 红领巾瓜报-Wakely paper,  and register for the 2027 ACA Considerations: Proposed NBPP and Other Key Changes and Trends.  

As 2025 draws to a close, Congress finds itself at a crossroads on several critical health policy issues, with the fate of the Affordable Care Act (ACA) subsidies front and center. The year has been marked by intense negotiations and a flurry of proposals, many of which remain unresolved as lawmakers look ahead to a pivotal January 30 deadline for appropriations spending bills. In this article, policy experts from 红领巾瓜报 (红领巾瓜报)鈥攊ncluding Leavitt Partners, an 红领巾瓜报 company鈥攑rovide a comprehensive wrap-up of Congress鈥� work on ACA subsidies, executive agency actions, and what stakeholders should anticipate in early 2026. 

ACA Subsidies: A Year of Uncertainty and Political Maneuvering 

The expiration of enhanced ACA subsidies at the end of 2025 has been a focal point for congressional debate. Despite numerous bipartisan groups and a multitude of proposals circulating, consensus has proven elusive. The Senate voted on an ACA-related measure December 11, 2025, but neither the Democrats鈥� proposal for a three-year extension nor the Republican alternative to replace subsidies with health savings accounts advanced and revise certain other Medicaid policies. 

The situation in the House has been equally complex. House GOP leaders unveiled a healthcare package designed to lower costs, expand association health plans, and increase transparency for pharmacy benefit managers. The package would not extend the expiring enhanced ACA subsidies, and even if the House bill passes, the Senate is unlikely to consider it. In addition, on December 17, House Democrats secured enough support to force a vote on a bill that would provide a three-year extension of enhanced subsidies, although House rules preclude scheduling a vote on the bill until January.  

The听prevailing sentiment among policy experts is that no substantial action will be taken before year鈥檚 end.听

The White House briefly floated a two-year extension of the enhanced subsidies, but walked back the proposal, signaling fluidity in the policy discussions within the administration and among congressional Republicans. The absence of consensus on both policy and political ramifications has left the ACA subsidy issue in limbo. 

Looking Ahead: January鈥檚 Appropriations Deadline and ACA Options 

December 15, 2025, marked the last day for consumers to enroll in ACA coverage policies that take effect January 1, 2026, meaning that for many health insurance purchasers, choices for 2026 are already set. Policymakers are now focused on another deadline for potential ACA subsidy action鈥擩anuary 30, 2026, when temporary funding for the current federal fiscal year expires. It is possible that a solution could be attached to the spending package, potentially affecting 2026 premiums, although operational challenges abound. The most feasible option at this stage would be a premium rebate, which would avoid reopening enrollment but require complex rate adjustments. Any substantive changes to the subsidy structure would demand significant actuarial analysis and could disrupt both health plans and state activities. 

Congressional Dynamics: Appropriations, Extenders, and Policy Riders 

The appropriations process is center stage as Congress approaches the January 30, 2026, deadline. Lawmakers are seeking to continue passing 鈥渕inibus鈥� packages鈥攕mall groups of appropriations bills鈥攖o avoid another government shutdown. Most Medicare and Medicaid policy priorities, including must-pass extenders like telehealth flexibilities and the hospital at home program, are dependent on appropriations vehicles to advance. If Congress resorts to a stopgap continuing resolution, only the most essential extenders are likely to be included, with broader policy riders at risk of being sidelined. 

Policy Outlook 

Pharmacy benefit manager (PBM) reform stands out as a top bipartisan priority, with both House and Senate members eager to advance transparency and de-linking measures. Other lingering issues from the December 2024 healthcare package include Medicaid spread pricing prohibitions, streamlined enrollment for out-of-state providers, and targeted benefits for military service members. In Medicare, multi-cancer early detection screening and digital health policies may resurface, though larger reforms like Medicare physician fee schedule changes are likely to be deferred until later in 2026. 

Agency Developments: CMS Innovation and Regulatory Changes 

Beyond Congress, the Centers for Medicare & Medicaid Services (CMS) has been active, rolling out new models and rules that will shape the landscape in 2026 and beyond. Highlights include the 2027 Medicare Advantage Policy and Technical Changes Proposed Rule. Although it introduces no major policy shifts, the proposed rule addresses quality measurement, special needs plans, the Health Equity Index, and administrative burden reduction. It also codifies changes from the Inflation Reduction Act, such as cost-sharing and out-of-pocket limit reforms. The new ACCESS model (Advancing Chronic Care with Effective, Scalable Solutions) is intended to incentivize tech-enabled care for chronic conditions, with the model beginning July 2026. 

CMS also released updates to the outpatient, home health, and durable medical equipment rules, with a continued focus on site neutrality (aligning payments across settings) and removing barriers to beneficiary choice. The agency is placing ongoing emphasis on data collection, price transparency, and updated payment methodologies to reflect modern practice and technology. The  (GENErating cost Reductions fOr U.S. Medicaid)鈥疢odel introduces most favored nation pricing for Medicaid, while additional mandatory Medicare drug pricing models are under review. Rural health transformation remains a CMS priority, with expectations for further announcements and awards before the end of the year. 

We expect 2026 to be another busy year for CMS with more new models being announced, continued policy refinements in the fee-for-service payment systems, and changes in Medicare Advantage based on feedback from the requests for information. 

Connect with 红领巾瓜报 Policy Experts 

As the new year approaches, uncertainty remains the defining feature of federal health policy. The fate of ACA subsidies, the appropriations process, and a host of other reforms will hinge on negotiations in the coming weeks. For stakeholders navigating these complex dynamics, 红领巾瓜报鈥檚 team of policy experts stands ready to provide guidance, analysis, and support.