Cigna announced in late April that it will abandon the Affordable Care Act exchanges in 2027, the latest major insurer to head for the exits as the marketplace built by the Obama-era health law sheds enrollees, hemorrhages federal dollars, and confronts a fraud problem the government itself has barely begun to contain.
The announcement follows CVS-owned Aetna's decision to stop offering ACA plans altogether. Centene, one of the largest remaining exchange participants, disclosed in March that its enrollment had dropped by more than 1.5 million in just a few months. And a recent projection from the Wakely Consulting Group estimates marketplace coverage could fall by as much as 26 percent in 2026 compared to average enrollment last year.
The trigger is straightforward: Congress refused to renew the enhanced federal subsidies that had been propping up the exchanges since the COVID era. Without that extra taxpayer money flowing to insurers, the economics of the ACA marketplace are reverting to something closer to reality, and reality, it turns out, is ugly.
For years, enhanced premium tax credits masked the true cost of Obamacare coverage. As of 2025, a full 93 percent of ACA marketplace enrollees received some form of premium subsidy. The average monthly gross premium for those enrollees was $619. In 2026, the benchmark silver plan costs $625 per month, and even the cheapest bronze option runs $456.
Those numbers land hard on families now paying closer to full freight. A March KFF survey found that 80 percent of returning ACA enrollees reported their 2026 premiums, deductibles, or copays were higher than the year before. Fifty-one percent said costs were "a lot higher."
Rep. Brittany Pettersen, a Colorado Democrat, acknowledged the squeeze in an X post Wednesday, calling the rising premiums "added costs for families who are already struggling to cover gas, groceries, and housing." That's a fair description of the symptom. But Pettersen's party spent years expanding the subsidies that inflated enrollment, weakened eligibility checks, and left the program dependent on ever-larger infusions of taxpayer cash.
The Paragon Health Institute put the cost in stark terms. By 2021, federal spending on the ACA exchanges hit $60 billion. For all that money, only 1.6 million additional Americans obtained private insurance coverage. That works out to an estimated $36,798 per additional enrollee, or $20,739 per additional non-group enrollee. Those are not the numbers of a program that works.
The financial waste extends well beyond bloated subsidies. The Congressional Budget Office estimated in October 2025 that 2.3 million marketplace enrollees improperly claimed the premium tax credit that year by intentionally overstating their income. That is not a rounding error. It is systemic abuse on a scale that should alarm anyone who pays taxes.
The Department of Justice announced in February that two executives were each sentenced to 20 years in prison after being convicted of running a years-long scheme to defraud the ACA program. The Daily Caller News Foundation reported that the Wall Street Journal editorial board described Obamacare in December 2025 as a "Mecca for fraud."
CMS has taken some steps. A January fact sheet stated the agency is "exercising its full statutory and regulatory authority to protect consumers from unauthorized enrollment activity and safeguard the integrity" of the exchanges. In June 2025, CMS issued a final rule aimed at adding "additional safeguards to protect consumers from improper enrollments and changes to their health care coverage."
Whether those safeguards arrive in time to matter is another question. Fraud in federal health programs has a way of outrunning the bureaucrats assigned to stop it.
Cigna's departure may feel sudden, but the pattern of major insurers fleeing the ACA exchanges is not new. A decade ago, UnitedHealth pulled out of ACA marketplaces in Georgia and Arkansas after losing money on exchange plans. The company reported losing $475 million on ACA exchanges in a single year, plus another $125 million in the first quarter alone. CEO Stephen Hemsley said bluntly: "Our own experience and performance have been unfavorable in these markets."
Aetna's earlier retreat was just as telling. In 2016, the insurer terminated coverage for 73 percent of its Obamacare individual policies, dropping plans in 11 of the 15 states where it had offered exchange coverage. At the time, CBO estimated subsidy tax credit costs would grow from $37 billion in 2015 to $56 billion in 2016 and reach $105 billion by 2025.
Back then, a CMS spokesman offered a line that could have been written yesterday: "As with any new market, we expect changes and adjustments in the early years with issuers both entering and exiting states." That was the official reassurance in 2016. Ten years later, the exits continue and the reassurances sound identical.
A CMS spokesperson told the Daily Caller News Foundation that the agency remains "committed to a strong, stable, and competitive Marketplace that continues to deliver meaningful coverage options for millions of Americans." The spokesperson added:
"Each year, the agency sees issuers expand and contract on the individual market for various reasons, and while it is concerning when any issuer decides to leave even one county, the agency continues to see strong market participation nationally."
The spokesperson also insisted that "consumers in every state still have access to a range of high-quality plans." But telling consumers they have access to plans is different from telling them those plans are affordable, especially when premiums just jumped and the subsidies that cushioned the blow are gone.
Almost 23 million Americans get medical insurance through the ACA exchanges, and roughly 8 percent of working-age adults who put in more than 20 hours a week rely on the individual market for coverage. These are not abstractions. They are real people watching their options narrow and their costs climb.
Gabrielle Minarik, a program manager at the Paragon Health Institute, pushed back on the idea that the exchanges are collapsing. She told the DCNF that the marketplace is "not in upheaval" but rather "adjusting after a period of subsidy expansion and a tremendous increase in enrollment, much of it improper." Her broader assessment was pointed:
"The enhanced subsidies distorted prices, weakened eligibility safeguards, inflated enrollment, led to widespread improper and phantom enrollment, and imposed substantial costs on taxpayers as well as people enrolled without their consent."
Minarik said she thinks a wave of additional insurer exits is unlikely but acknowledged that "further reductions in effectuated enrollment" in the individual marketplace will probably occur "as the market returns to more normal subsidy parameters and program integrity measures take effect." She credited the first Trump administration with stabilizing coverage after the law's early instability by expanding consumer options and restoring market discipline.
Jeffrey Tucker, founder of the Brownstone Institute, offered a bleaker view. He told the DCNF that "medical insurance has become unbearably expensive, and this is even before a single service is used." For many people, he said, paying premiums "truly makes no sense." Tucker noted that crowdsourced alternatives to the ACA "are doing well even with the legal limits," and that some people with built-up Health Savings Accounts "drop medical insurance completely and take their chances. This is actually a rational choice."
That an analyst would describe going uninsured as "rational" says something about where the ACA marketplace stands. Tucker also argued that insurers face "extreme limits" to leaving the Obamacare system, citing "draconian mandates on business" and exit ramps that are "too restrictive." His prescription: "universal and unlimited HSAs" and a rollback of defined-benefits mandates.
Rep. Jason Smith, a Missouri Republican, put it more simply in a January social media post: "After 15 years of a Democrat-created health system under Obamacare, [healthcare] prices have only gone up." Healthcare now represents almost one in every five dollars spent in the nation's economy.
The Obama-era law was hardly the first force driving up costs. A 2014 Commonwealth Fund report noted that individual-market premiums rose an average of 10 percent or more annually during the three years before the ACA was enacted. But the law was sold as the solution. Fifteen years in, the problem is worse, the subsidies are gone, and the insurers are leaving.
The Obamacare exchanges were always a political construction held together by massive federal spending. Enhanced subsidies papered over structural problems, overpriced plans, rampant fraud, phantom enrollments, and a marketplace that couldn't attract enough healthy customers to stay solvent without government cash. Now that the cash has stopped flowing at emergency levels, the cracks are widening fast.
Cigna did not respond to requests for comment about its exit. Aetna declined to comment. Healthinsurance.org noted in a May 1 report that carrier exits usually happen at the end of a calendar year and that mid-year departures have been "highly uncommon." The fact that insurers are announcing their plans months in advance suggests they see no reason to wait and see.
None of this had to happen. A marketplace built on sustainable economics rather than ever-expanding subsidies might have attracted insurers instead of repelling them. A system with real eligibility enforcement might not have 2.3 million people gaming the premium tax credit. A program with genuine accountability might not need billions of dollars poured into "innovation" programs that lose money year after year.
But the architects of the ACA chose a different path. They chose mandates, subsidies, and a regulatory structure so tangled that even the insurers who helped design it now want out.
Meanwhile, the federal government pushes forward with new interventions in hospital operations while the foundational marketplace it built continues to shed participants and credibility.
When the people who sell insurance for a living decide the government's insurance marketplace isn't worth the trouble, taxpayers ought to ask why they're still paying for it.
