Rising ACA costs push some to short-term health insurance options

The early read on 2026 Affordable Care Act enrollment looked stable. That view is changing, however, said Jae Oh, author of "Maximize Your Medicare," in an interview with TheStreet.

New state-level data show a sharp drop in coverage in some markets following the expiration of enhanced premium tax credits.

In New Jersey alone, roughly 14% of enrollees - about 440,000 people - have canceled their plans, according to figures cited by Jae Oh.

The shift marks a clear break from earlier expectations that most households would absorb higher premiums or downgrade to cheaper plans.

Instead, many are leaving the system entirely. Some of those leaving, however, should consider short-term health plans.

Below is a transcript of the interview with Oh, edited for clarity and brevity.

ACA enrollment drops as subsidy changes take hold

Robert Powell: We're still getting data about the number of people enrolling in the Affordable Care Act here in 2026.

Joining us to talk about what's changing is Jae Oh, CFP, author of "Maximize Your Medicare." When we last spoke, it looked like many people were signing up despite the elimination of the enhanced advanced premium tax credit. But new data are coming in. What are we learning?

Jae Oh, CFP: State-by-state official numbers are coming in, and they are complicated. Early in the year, the data suggested that most people didn't drop their health insurance. We had speculated whether that was simply because people hadn't opened their mail yet.

There's a 30-day grace period. For example, for January coverage, you might not actually pay until February. There's also a lag in reporting. But now we're well beyond that period, and we are seeing dramatic numbers.

One example that stood out is New Jersey. In the state's ACA marketplace, roughly the mid-teens percentage of enrollees have canceled coverage, which is significant, given the size of the state.

Robert Powell: According to the data you sent, that's about 440,000 people, with more than 14% dropping coverage. Does that mean they're going without insurance entirely, not even moving to a cheaper plan?

Jae Oh: That's a full drop. It doesn't include people who downgraded to weaker plans.

The hope had been that people facing higher premiums in 2026, driven by rising health care costs and the loss of enhanced premium tax credits, would shift to less expensive plans but still maintain coverage.

That's not what we're seeing here. The 14% represents people who have exited coverage altogether, which is alarming.

Financial risk rises for households without health insurance

Robert Powell: If they go without insurance, they'll have to pay out of pocket for care. In a worst-case scenario, such as cancer or another major illness, that could lead to bankruptcy.

Jae Oh: That's correct. This highlights a misunderstanding about the role of health insurance in a household's financial plan.

People sometimes compare health insurance to an investment, like owning a stock. That's not its function. It's a layer of protection. It helps limit the range of financial outcomes.

In New Jersey, we're seeing a clear example that many people either didn't view it that way or still found it unaffordable and chose to cancel.

ACA alternatives exist, but with trade-offs

Robert Powell: Some of these households may need to revisit their budgets. They might look at discretionary expenses or even essential spending to see whether they can afford some level of coverage. But at this point, enrollment options may be limited.

Jae Oh: For people who have canceled coverage, either voluntarily or not, there are still options if they want some level of protection.

Short-term health plans, often called "junk insurance," are one option. I don't necessarily view them that way. They are weaker, but they are still better than being uninsured.

They do remove some Affordable Care Act protections. For example, underwriting can apply. It's not as extensive as traditional underwriting, but it exists.

Even so, these plans can still provide a layer of protection for households.

ACA health insurance unenrollment: a fading headline with lasting consequences

Robert Powell: Anything else we should be paying attention to?

Jae Oh: This issue has faded from the headlines, but it remains a concern, especially for people who are aging or face a higher likelihood of significant health care costs.

Related: Medicare vs. HSA: the costly mistake to avoid at 65

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This story was originally published April 28, 2026 at 5:33 PM.