After years of record growth driven by subsidized premiums, enrollment in Affordable Care Act (ACA) exchange plans plummeted this year from its all-time high of 24.3 million members in 2025. Enrollment in Medicaid and commercial group risk plans is on the decline, while Medicare enrollment is more static; meanwhile, enrollment in commercial ASO/self-funded plans is on the upswing.
What do these shifts mean for providers, manufacturers, payers and health IT vendors? Let’s take a look at the data from MMIT’s Directory of Health Plans, which recently released its Q1 2026 update for enrollment tallies across all lines of business.
After Years of Growth, ACA Exchange Enrollment Reverses Course
As expected, membership in public exchange plans continued to decline following the expiration of enhanced ACA premium subsidies at the end of last year. Members decreased by nearly 847,000 in the fourth quarter of 2025.
Enrollment has fallen by an additional 11.43% since then, and is expected to keep decreasing as the year progresses. During open enrollment, many members were automatically reenrolled in last year’s plans. As the grace period for premium payments expires, a significant portion of those members are likely to be disenrolled for lack of payment.
Premiums for ACA plans soared in 2026, leaving membership unaffordable for many. While rate increases varied by state, premiums for the benchmark silver plans jumped by an average of 21%, which represents an extraordinary increase from the roughly 2% year-over-year growth seen during the last five years. According to KFF, average out-of-pocket payments for ACA members who were previously receiving premium tax credits have more than doubled without the assistance.
Many insurers have left or are planning on leaving the ACA exchange market in the wake of these changes, as its dwindling size and potentially increased risk pool has impacted plan profitability. The most notable example is Aetna, which has now completed its exit of the public exchange market. The largest remaining ACA marketplace insurer, Centene, dropped 33% of its ACA membership in Q1 2026, and publicly stated that it expects to shed more members throughout the year.
While most insurers lost members, others benefitted from market exits and retractions, particularly mid-size regional payers that scooped up members shopping for an affordable plan. Although nearly 30 insurers’ membership declined by at least 10,000, more than 20 insurers gained more than 10,000 members. Oscar Health saw the most significant growth, adding more than 1 million members, an increase of 54%.
Medicaid Contraction Continues as Implementation of Work Requirements Nears
In Q4 2025, membership in Medicaid health maintenance organization (HMO) plans fell by more than 1 million, while direct Medicaid fee-for-service (FFS) programs lost 296,000 members. While enrollment in the Medicaid space has continued to decline, these decreases are flattening in Q1 2026: Medicaid HMO membership fell by 381,000, while Medicaid FFS membership decreased by 96,000.
Notable insurer-level changes in the managed Medicaid space include UnitedHealthcare’s loss of nearly 268,000 members, largely due to its exit of the Medicaid market in Louisiana. In contrast, Centene gained 479,000 members in North Carolina after it consolidated its WellCare Medicaid membership into its Carolina Complete Health brand.
With the passage of 2025’s One Big Beautiful Bill Act (OBBBA), the post-pandemic Medicaid unwinding has seemingly morphed into a more permanent structural contraction of Medicaid. The bill introduced many Medicaid reforms, including lowering the cap on state-directed payments for providers who serve a large number of Medicaid patients. Some of these reforms—such as new administrative requirements and eligibility conditions, including an 80-hour per month work requirement—are slated to take effect in January 2027, barring a successful legal challenge.
According to one study, the new work requirements, along with a mandatory 6-month redetermination requirement, are likely to result in between 5 and 10 million people losing Medicaid coverage by 2028. As reported on the MMIT blog last year, 76% of surveyed payers anticipated that their organization’s overall costs would rise because of the expected reduction in Medicaid recipients. Notably, payers expect the new law to significantly impact their commercial line of business as well, with rising costs driving increases in premiums and reductions in benefits.
Medicare Advantage Nets Modest Gains Despite Market Upheaval
The Medicare market had a turbulent open enrollment season in the fall of 2025, as many large payers retracted their MA and Part D offerings. Approximately 10% of all enrollees in MA plans needed to switch insurers and find alternative coverage.
Ultimately, Medicare Advantage (MA) plans and those for dual-eligible members (individuals are enrolled in both Medicare and Medicaid) gained nearly 135,000 new members in 2026 as these shifts played out. (These numbers reflect both Q1 and Q2 data for MA and dual-eligible plans.)
After enacting an aggressive 2026 enrollment strategy, Humana gained more than 1.1 million new MA members and 156,000 dual-eligible members in Q4 2025. Humana continued this momentum into 2026, netting 43,000 new members, the largest overall increase.
Employers Turn to Self-Funded Plans as Group Risk Membership Shrinks
Commercial group risk enrollment again decreased since the fourth quarter, dropping 717,000 members. The decline was fueled by significant losses (866,000) in the large group market (plans for employers with 50+ employees). Many insurers reported membership shifting to the small group market, which picked up more than 148,000 lives.
Interestingly, enrollment in self-funded and Administrative Services Only (ASO) plans saw significant gains of 1.97 million members. Clearly, more employers are choosing to directly pay for their employees’ medical claims to cut costs. Self-funded plans are typically much more customized, as employers can directly control which benefits and treatments are covered.
Notable changes in the commercial group market include Elevance Health’s gain of 587,000 ASO lives to offset its loss of 219,000 group risk members. Similarly, Blue Cross and Blue Shield of Minnesota balanced a group risk loss of 106,000 members with a gain of 150,000 ASO plan members.
What These Enrollment Shifts Mean for Pharma and Health IT Companies
For pharma companies, these market shifts signal a fundamental realignment of where patients live in the coverage landscape. Significant losses in ACA exchange and Medicaid enrollment mean that patients who previously had subsidized or government-funded access to therapies may now be uninsured or underinsured.
Many are migrating into commercial or self-funded plans with very different formulary structures and benefit designs. Manufacturers need to track these movements at the insurer and regional levels, not just the channel level, to anticipate access barriers, adjust their patient support programs, and ensure their brands remain accessible.
For health IT vendors and payers, the Directory of Health Plans Q1 2026 update underscores the urgency of working with current, granular enrollment data. As major insurers exit markets, consolidate brands, and shift members between product lines — as seen with Centene, UnitedHealthcare, and Humana in this quarter alone — the payer landscape is evolving faster than annual planning cycles can accommodate.
Organizations that rely on stale or aggregated data risk misallocating resources, missing emerging opportunities in growth segments like ASO plans, or failing to anticipate the ripple effects of OBBBA’s Medicaid reforms, which are expected to displace millions of additional beneficiaries in the years ahead. Staying ahead of these shifts requires continuous, plan-level monitoring across all lines of business.
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