KFF’s May 19 enrollment tracker projects that effectuated ACA marketplace enrollment will fall from 22.3 million in 2025 to roughly 17.5 million in 2026, a decline of up to 4.8 million people. The drop follows the expiration of enhanced premium tax credits at the end of 2025. Average net monthly premiums rose 58%, from $113 to $178, and average deductibles jumped 37% to $3,786. For self-funded plan sponsors, the question is not what happens to the marketplace. It is what happens when displaced enrollees land in employer-sponsored coverage, or go without coverage entirely and show up later with pent-up claims.
Who it affects
Self-insured employers across every industry, particularly those with large hourly or variable-hour workforces where employees are most likely to have previously held marketplace coverage. The shift is national: enrollment declined in 41 states, with North Carolina (-22%), Ohio (-20%), and West Virginia (-17%) leading. Young adults aged 18 to 34 accounted for 46% of the enrollment decline, and that cohort is the most likely to move onto an employer plan when marketplace coverage becomes unaffordable. Employers in states without Medicaid expansion face the most acute exposure, as workers who lose marketplace coverage in those states have fewer fallback options.
The reserve mechanism: risk pool composition and pent-up utilization
The enrollment collapse works through two channels.
Composition shift. Members migrating from marketplace plans to employer coverage bring utilization histories that are invisible to the plan’s actuary. A worker who carried a $3,786 deductible bronze plan (the new marketplace average) may have deferred elective procedures, specialist referrals, and chronic disease management. Once they enroll in an employer plan with a lower deductible and richer pharmacy benefit, that deferred demand converts to claims. The expected claim ratio set during the last renewal cycle was built on the old member mix, not the incoming one.
Severity from the uninsured pipeline. KFF found that 9% of 2025 marketplace enrollees became uninsured, and another 17% of returning enrollees reported lacking confidence they could afford premiums for the full year. People who go without coverage accumulate untreated conditions. When they later gain employer coverage through a new job, a qualifying event, or open enrollment, they present with higher-acuity claims. This is the same pent-up utilization pattern that drove claims spikes after the 2014 Medicaid expansion and the post-pandemic Medicaid unwinding.
Georgetown CHIR’s state-level analysis confirms the attrition is accelerating: disenrollments quadrupled in Idaho and Pennsylvania, and California’s middle-income enrollment (400% to 600% of the federal poverty level) dropped 63%. These are working adults with employer-plan access who opted for marketplace coverage only because subsidies made it cheaper.
Stop-loss attachment pressure
Specific stop-loss attachment points negotiated before the enrollment shift may not reflect the higher acuity of incoming members. Plans already facing pharmacy and stop-loss pressure from GLP-1 costs now confront a compounding risk: new members with untreated chronic conditions triggering large claims against attachment points set for a healthier pool. Aggregate stop-loss corridors face the same exposure if total plan cost rises faster than the corridor’s trend assumption.
What this means for your next review
Ask your actuary whether the current expected claim ratio accounts for demographic shifts in your enrolled population since the last valuation. If your plan added members who previously held marketplace or individual coverage, the utilization assumptions underlying your IBNR estimate may be stale. Request a mid-year claims experience extract broken out by enrollment date, and flag any concentration of high-cost claims among recently enrolled members. If your stop-loss renewal is approaching, model the attachment point against a scenario where 5% to 10% of your population carries pent-up utilization from prior coverage gaps.