Affordability, not fraud, is why fewer Americans have health insurance
Affordability not fraud is why fewer – Once, political leaders emphasized that financial security was the foundation of a thriving society, and that uninsurance was a problem to be addressed. But in recent years, that conviction has faded, replaced by a focus on other narratives. Today, the decline in health insurance coverage among Americans is often attributed to alleged fraud, yet the real driver is affordability. Rising premiums in the Affordable Care Act (ACA) individual market have created a steady erosion of participation, and policymakers have exacerbated the issue by complicating access to coverage.
The individual market under the ACA has seen premiums soar, with policymakers contributing to this trend through a combination of policy choices and regulatory changes. These adjustments have introduced substantial barriers to maintaining coverage, forcing many individuals to choose between paying increasingly high costs and forgoing health insurance altogether. The consequences of this shift are now evident: enrollment numbers have dropped significantly, and the market is facing a quiet but steady exodus of participants. This has left both consumers and insurers grappling with the fallout of decisions made years ago.
The Changing Landscape of Enrollment
New data from the Centers for Medicare and Medicaid Services (CMS) reveals a troubling pattern in enrollment trends. During open enrollment in March, the number of people enrolled in the ACA market fell by 5 percent compared to the previous year. More alarmingly, new enrollment dropped by 13 percent, signaling a broader loss of interest. While these figures may seem manageable at first glance, they mask a deeper issue: many of those who had previously enrolled are now leaving the market. This has created a slow-motion decline, as the grace period for unpaid premiums allows individuals to remain in coverage even after failing to meet their financial obligations.
Actuarial firm Wakely’s recent findings further highlight this trend. Their analysis shows that only 86 percent of 2026 enrollees paid their first premium. This percentage dropped below expectations because of a 90-day grace period, which gave individuals time to settle their payments without immediate consequences. However, the effect of this delay is now clear: the market is experiencing a gradual fadeout, with enrollees falling off the rolls in waves. This lagged disenrollment underscores the growing strain on affordability, as the cost of coverage becomes a more immediate barrier than ever before.
A Misleading Narrative
Washington’s explanation for these enrollment declines centers on a “fraud, waste, and abuse” narrative. Yet this story doesn’t align with the data. The administration’s claims of program integrity are often cited as proof of the ACA’s success, even as enrollment numbers continue to fall. Secretary Robert F. Kennedy Jr. emphasized this point in April, telling Congress that “the only people leaving the market were those who were never entitled to coverage.” While some fraud cases have been identified, the administration has stretched the narrative to fit its agenda, using vague metrics to justify its stance.
“The only people leaving the market were those who were never entitled to coverage.”
This argument lacks the evidence it claims to rely on. While fraud has existed in the individual market, it has not been the primary cause of the decline. Instead, the pattern of enrollment loss reflects a broader shift in consumer behavior driven by cost. Many states have reported similar trends, with enrollment declines linked to rising premiums and the shift toward plans with higher out-of-pocket costs. These changes have been documented across multiple marketplaces, including Pennsylvania, where cost concerns were the most frequently cited reason for dropping coverage.
The administration’s approach to addressing these issues has also been a point of contention. By tightening procedures for enrolling individuals, they made it harder for brokers to sign people up without their knowledge. While this was intended to reduce fraudulent activity, it also increased the difficulty for people to access coverage. The result has been a dual impact: higher costs and more complicated enrollment processes. Together, these factors have pushed many individuals out of the market, even as the government insists the problem is due to improper enrollment.
The Cost of Rising Premiums
One key element missing from the administration’s narrative is the role of sharply increasing premiums. These hikes have not only made coverage more expensive but have also altered the dynamics of the market. As prices climb, individuals with lower incomes are more likely to drop out, while those with higher incomes may choose to stay but opt for plans with more cost-sharing. This shift reflects a fundamental change in how people value insurance: when premiums become unaffordable, the priority for many is to save money rather than maintain coverage.
Recent rate filing data supports this trend, with projected increases for 2027 showing a continuation of the premium surge. Some insurers have already announced double-digit rate hikes, with some filings exceeding 20 percent in New York and Washington. These increases are part of a national pattern, as new estimates predict the individual market could contract by as much as 26 percent. The market’s instability is also reflected in the number of counties with only one insurer, a key indicator of potential collapse. This number has risen from 72 in 2025 to 145 in 2026, and is expected to surpass 200 in 2027 as more insurers exit the market.
The administration’s focus on fraud has allowed it to downplay the affordability crisis. By framing the decline as a victory for program integrity, it shifts the blame away from policy decisions that have made coverage less accessible. Yet the evidence points to a different conclusion: the ACA’s market is struggling because of rising costs, not because of widespread fraud. The real issue lies in the interplay between premium increases and consumer choices, with many people sacrificing coverage to avoid financial strain.
As the market continues to shrink, the impact on vulnerable populations becomes more pronounced. Enrollment declines are not random—they are driven by individuals who need care the most. New estimates suggest that morbidity in the individual market could rise by 6.5 percent, further highlighting the consequences of affordability issues. This means that the people most affected by the lack of insurance are those who are also most likely to lose access to it, creating a cycle of exclusion and financial burden.
Ultimately, the administration’s strategy has been to cast the decline as a success story, but the reality is more complex. While fraud has played a role, it is secondary to the systemic issue of rising premiums. By focusing on this narrative, the government avoids addressing the root cause of the problem, even as the market continues to contract and the health of its participants declines. The time has come to reevaluate the ACA’s approach, ensuring that affordability remains the central focus of any efforts to stabilize the individual market.
