The healthcare industry spent most of 2025 bracing for impact. With enhanced ACA subsidies set to expire at the end of the year, experts painted a grim picture: millions would drop coverage, and the individual marketplace would enter a death spiral.
The projections were dire across the board. The Congressional Budget Office projected that approximately 4 million people would drop their coverage. Other estimates ranged even higher, with one analysis suggesting marketplace enrollment could drop to as low as 18.9 million in 2026—a loss of more than 5 million enrollees from 2025's record-breaking enrollment. The narrative was clear: the individual market was heading for catastrophe.
The Reality: A Modest Decline, Not a Collapse
Fast forward to January 2026, and the actual numbers tell a very different story.
According to preliminary data from the Centers for Medicare and Medicaid Services released January 12, 2026, health insurance exchange enrollment is trending downward compared with a year ago, but only modestly. The preliminary data shows enrollment down 3.5% from a comparable period a year ago—a far cry from the multi-million person exodus that was predicted.
Perhaps most telling: 2026 enrollments still rank as the second-highest in the marketplace's 12-year history. This isn't a market in freefall. This is a market that has proven to be far more resilient than the forecasters expected.
Even more encouraging, the data revealed a geographic split that suggests the market's infrastructure is holding strong. While federal platform enrollments slipped 6.9%, state-based exchange enrollments actually grew by 4.6%. This divergence points to a marketplace adapting rather than collapsing.
Why the Predictions Missed the Mark
So what happened? Why was the enrollment decline so much smaller than predicted— especially given that premiums did increase significantly for many enrollees?
Several factors likely contributed to the more stable outcome:
Stickier enrollment than expected: People who had been covered for several years, whether under the enhanced subsidies or not, had experienced the value of health insurance. Many chose to make financial sacrifices rather than go uninsured.
Higher awareness and urgency: The extensive media coverage around subsidy expiration actually drove more people to enroll rather than scare them away. When coverage options dominate the news cycle, people pay attention.
State-level support: States like New Mexico, Colorado, Connecticut, and California stepped in with their own subsidy programs, cushioning the blow for their residents.
The "wait and see" factor: Many enrollees may have maintained coverage in January, anticipating that Congress would eventually act on an extension—which indeed passed the House in early January 2026.
Income stratification: The majority of marketplace enrollees—about 75% in states like Texas—have incomes below 200% of the Federal Poverty Level and still had access to significant subsidies or even $0-premium plans.
The ICHRA Opportunity Window Just Got Wider
For benefits brokers and HR leaders, this resilient marketplace presents a tremendous opportunity for Individual Coverage Health Reimbursement Arrangements (ICHRAs).
When the predictions called for millions to exit the marketplace, the implication was that ICHRAs—which rely on a robust individual market—would struggle to find their footing. But with enrollment holding relatively steady at historically high levels, the foundation for ICHRA adoption is stronger than ever.
Here's why this matters:
The individual market infrastructure is solid: With enrollment hitting nearly 23 million, and a wide variety of plans available, employees using ICHRA have genuine choice and competition. The market didn't implode—it adapted.
Cost pressures create ICHRA appeal: For employers, ICHRAs offer predictable, capped contributions while giving employees flexibility. In an environment where employees are navigating higher premium costs, the defined contribution model becomes even more attractive than absorbing unpredictable group plan increases.
Bringing stability to the marketplace: ICHRA fundamentally brings employed people into the individual market. Younger, healthier employed individuals entering the marketplace through ICHRA arrangements can help stabilize risk pools and strengthen the overall market.
Looking Ahead: ICHRA's Moment
The healthcare landscape is shifting beneath our feet. Traditional employer-sponsored insurance continues to become more expensive and administratively burdensome, particularly for small and mid-sized businesses. At the same time, the individual marketplace has proven it can withstand significant headwinds and still provide coverage to tens of millions of Americans.
ICHRA sits at the intersection of these trends. It offers employers:
- Cost predictability through defined contributions
- Administrative simplicity compared to managing group plans
- Competitive advantage in attracting and retaining talent who value choice
- Flexibility to scale benefits as a workforce grows
For employees, ICHRA provides:
- Plan choice tailored to individual and family needs
- Portability that isn't tied to employment status
- Transparency in understanding the true cost of coverage
The fact that ACA enrollment remained robust despite the subsidy expiration and resulting cost increases tells us that Americans value their health coverage and are willing to navigate the marketplace to get it. That bodes extremely well for ICHRA adoption.
The Bottom Line
The sky didn't fall in 2026. Instead, we saw a marketplace that proved more resilient, more adaptable, and more stable than forecasters expected. Rather than shrinking into irrelevance, the individual market remains the second-largest enrollment year in its history.
For brokers and HR leaders, this answers any questions about ICHRA’s long term viability. The infrastructure is there. The enrollment numbers support it. The door isn't just open—it's wide open.
