Political tumult around the Affordable Care Act's exchanges colored the final months of 2025, and talk about what the marketplaces look like now dominated many insurer and provider earnings calls in Q1.
Many payers had laid the groundwork in 2025 rate filings for a scenario in which the enhanced premium tax credits went away and program integrity measures were fully implemented. In the latter case, those changes have been stayed by the courts, but the expiry of the EPTCs has driven significant shifts in member mix.
Some plans are also seeing fairly stable membership in the early months of the year but expected to see enrollment recede in the future.
For example, Elevance Health executives said the company is set to close the second quarter with about 1.2 million individual market enrollees. However, they're expecting that to decline to about 900,000 by the end of the year.
Automatic re-enrollment is common in the ACA markets, which is likely a contributing factor in the relatively stable enrollment numbers early in the year. But as people get a clearer picture of their premiums or other insurance costs, further churn is expected.
Elevance executives also said there's been a consistent shift of members from silver or gold tier plans to bronze tier coverage, which usually carries lower premiums in exchange for higher deductibles or other cost-sharing for the enrollee.
With the tax credits out of the picture, this shift was also expected.
UnitedHealthcare, the country's largest insurer, also experienced a contraction in its ACA enrollment, CEO Tim Noel told investors in April. He said they expect to see total membership to decline by about one-third over the course of this year, though did not break out how much of that would be attributable to the ACA market.
The company also made a pledge to rebate any profits in its ACA plans to consumers, and Noel said that promise is baked into its performance in the first quarter. In addition, he said the team is putting a focus on bronze and gold tier plans in the absence of the EPTCs.
"Our approach in the ACA market continues to be directed toward the bronze and gold-tiered products, where member mix and utilization rates are largely aligned with plan," Noel said.
Carriers like Elevance and UnitedHealthcare are relatively small players on the exchanges, comparatively, and this market has consistently proven a challenge. A number of insurers exited the marketplace in the early days following massive losses chose to re-enter once they became more stable, and results were mixed.
Aetna, for instance, returned to the ACA exchanges in 2022, but chose to exit for the 2026 plan year because their marketplace plans didn't gain as much traction as was expected. Cigna announced on its first quarter call that it also intends to exit the exchanges for 2027 following the renewed instability.
Chief Financial Officer Ann Dennison told investors that shift will allow Cigna to "focus on areas where we can best offer differentiated value to make a more meaningful difference in the health and experiences of those we serve," and that the decision to exit the exchanges was a part of a broader adjustment in its plan portfolio strategy.
Brian Evanko, Cigna's chief operating officer, said that the marketplace business for the company is shrinking and already was small. Given its size, the management oversight necessary was not proportional and the company did not see opportunity to scale in the future.
"We did not make this decision lightly and appreciate the importance of ensuring patients have continuity through the transition," Evanko said during the earnings call.
For the plans with more of their business concentrated in the exchange market, the results for ACA plans largely fell within expectations. Centene, for example, put a focus on shoring up its Medicaid business through much of 2025 and early 2026, so the sting of a drop off in exchange enrollment was lessened.
The company saw 2 million members drop out of its marketplace plans between Q1 2025 and Q1 2026. Centene boasted 5.2 million individual market members a year ago, which declined to 3.2 million.
CEO Sarah London offered a look at the state of the company's ACA plans in March, saying that the membership decline of about 40% is in line with what Centene anticipated given the state of the market. She said further attrition throughout 2026, though at lower levels, is expected, too.
She also noted similar shifts in plan tiers, saying that the bronze tier was looking more like a "mixed metal" in terms of enrollee behavior as they chose more affordable coverage.
"Marketplace still has a number of moving parts, but we have additional visibility as we’ve moved through the quarter," London said.
Oscar Health, meanwhile, saw its membership jump 56% year-over-year in the first quarter, though there is still churn expected throughout the year. Oscar began the second quarter with about 3 million members.
With the pressure on the core exchange business, Oscar has set its sights on individual coverage health reimbursement arrangements, or ICHRA, to help mitigate the damage. The company unveiled its new Lucie insurance marketplace, which CEO Mark Bertolini said Oscar expects to backstop broader scale for ICHRA.
Lucie was born from employer interest in ICHRA, along with the perception that the benefits workers could access were not as comprehensive as would be desired.
"It's another margin opportunity for us to grow the bottom line and the top line of the organization over time," Bertolini said.
The provider perspective
Health system executives confirmed that upheaval in the exchanges is starting to play out at the ground level of care delivery, though at least initially the drop-offs in volume and payer mix has fallen inside their top-of-the-year projections.
Some health system leaders suggested that the impact has so far been less than they had initially expected, while others told curious analysts that it was still too early to make a trend-level appraisal of the fallout. Either way, the systems said they believe the changes in patient coverage and behaviors will ramp up with each quarter due to two factors: 30- and 90-day missed payment grace periods for consumers built into the health insurance exchanges, and the cumulative financial burden of heightened premiums on poorer patients.
Take HCA Healthcare, the country’s largest for-profit, which previously told investors it expects anywhere from $600 million to $900 million in combined earning reductions across the full year. In last month’s first-quarter earnings call its executives estimated that the exchange market changes drove a $150 million hit during the first three months of the year, and that it was still on course to land within its initial prediction.
More specifically, the company outlined a 15% drop in same-facility equivalent adjusted admissions among exchange patients, with the caveat that the tally includes their best estimate of how many such patients presented with an exchange plan but ultimately will not be covered. HCA also saw a 16% rise in same-facility uninsured admissions, much of which executives said was tied to movement from the exchanges (stiffer administrative requirements for Medicaid enrollment also played a role, they added).
The health system’s for-profit peers detailed their own volume changes and impacts during Q1 earnings call.
Universal Health Services said it’s weathered a $15 million earnings hit that’s still expected to ramp up to the $75 million estimate for the year. Its adjusted admissions among exchange patients fell 5%, but the true impact is expected to land at 11% or 12% when those disenrolled due to premium payment difficulties are revealed.
Ardent Health still expects a $25 million earnings hit for the year, though Chief Financial Officer Alfred Lumsdaine said their exchange volumes were “actually up a percent or two” from initial projections. Community Health Systems outlined a 3.9% drop in adjusted admissions from the exchanges, as well as a related uptick in self-pay volumes.
Tenet Healthcare’s exchange volumes were down about 10% from the prior year’s first quarter, which executives noted reflects a 9% to 10% dip in that business’ revenues. That reduction is below what the company initially believe would be a more “linear” ramp-up in volume drop-offs, though executives asserted it was still too early to make a more concrete call on the trajectory of those volumes or the resulting payer mix.
The first-frame updates follow multiple quarterly investor calls in which executives sought to reassure analysts that the exchange populations, while inflated due to the subsidies passed during the pandemic, are low margin and a relatively smaller slice of their overall revenues.
More broadly, some of the health system executives did acknowledge they were seeing a shift in metal tiers, where consumers opt for marketplace plans with lower premiums but higher out-of-pocket limits, as well as a change in silver plan designs to include greater patient cost-sharing. Such changes increase providers’ exposure to non-payments and bad debt.