Arizonans are dropping their Obamacare insurance. Why it matters

More than 50,000 Arizonans have dropped their Affordable Care Act plans since January, new data show, raising concerns that the state’s population of uninsured and underinsured people is rising.

The federal Centers for Medicare & Medicaid Services, or CMS, says that by the Jan. 15, 2026, enrollment deadline, 357,144 Arizonans had signed up for Affordable Care Act plans for the 2026 year.

The plans are often also known as ACA or Obamacare insurance. By March 1, Arizona enrollment had declined by 14% to 306,798, according to new data from the Arizona Department of Insurance and Financial Institutions.

Year-over-year enrollment in Arizona ACA plans is down by more than 100,000 people, the data says, possibly due to sticker shock from higher premiums and deductibles in 2026. 

An analysis of CMS data by KFF, an independent health policy, research and news organization, found that sign-ups for ACA coverage declined in 41 states in 2026 and that in percentage terms, plan selections fell the most in North Carolina, Ohio, West Virginia, Indiana, Delaware and Arizona.

ACA plans are overall more expensive for consumers in 2026 because congressional Republicans and the Trump administration decided not to continue enhanced federal subsidies to help pay for the plans that began under President Joe Biden in 2021 amid COVID-19-related unemployment and economic stress.

Republicans, many of whom dislike the ACA, argued that the enhanced subsidies, which expired Dec. 31, 2025, were always supposed to be temporary. The Congressional Budget Office estimated that making the enhanced subsidies permanent would cost the federal government $335 billion over 10 years, which also drew criticism about cost.

Arizona enrollment in ACA health plans is declining

Arizonans are dropping out of their Affordable Care Act health plans. Plans are more expensive in 2026 because Congress and the Trump administration did not extend enhanced federal subsidies that began under President Joe Biden in 2021 and resulted in increased enrollment.

The state Insurance Department obtained the March 1, 2026, enrollment data by asking all of Arizona’s health insurance companies with ACA plans for “effectuated” ACA enrollments, which means the first bill has been paid and the enrollment is active, according to department spokesperson Kerri O’Brien.

“The early January data from the government is always a bit inflated because it counts everyone who clicked ‘sign up,’ whereas our March data only counts the people who actually paid and are now covered,” O’Brien wrote in an email.

Effectuated enrollment is the most accurate way of looking at who is actually covered by the ACA health plans, said Swapna Reddy, a clinical professor at the Arizona State University College of Health Solutions.

“The numbers are speaking pretty loudly in the first half of the year, and they not necessarily singing a particularly positive song,” Reddy said. “It’s fairly jarring what has happened in a fairly short period of time.”

According to O’Brien, Arizona’s effectuated enrollment in the ACA plans was 28% higher as of March 1, 2025, at 428,026 people. That means more than 100,000 fewer Arizonans are enrolled in ACA plans in 2026 than they were a year ago.

Arizona Obamacare enrollment down 28% since March 2025, state says

It’s unclear whether the Arizonans giving up their ACA enrollment are going to other forms of health insurance, like employer-sponsored coverage, or if their incomes are dropping and making them qualified for Medicaid. Some could be choosing more “bare bones” plans that are not ACA-compliant, are not comprehensive and will leave them underinsured, Reddy said.

The KFF analysis showed that about a quarter of the people nationally who signed up in 2025 but not in 2026 are in a higher income category in which federal subsidies to help pay for ACA plans disappeared in 2026.

“There’s not a lot of other options, especially for folks who are not in the low or very low income category,” Reddy said of coverage choices. “If you have a chronic condition or a condition that becomes more acute, often the bare-bones plans don't cover those needs. ... I think it’s very tricky for the consumer right now.”

ACA plans are for working-age people who earn too much to qualify for Medicaid and don’t have other health insurance coverage. The plans are private health insurance with federal subsidies available for those who qualify to help pay for it.

The insurance plans are available on marketplaces created by the 2010 ACA. While some states, including California, Colorado and New Mexico, use state-based marketplaces, Arizona uses the federal marketplace for ACA plans.

It is also possible that some of the people who dropped their ACA coverage are now uninsured, said University of Arizona public health professor Dr. Daniel Derksen, who is also director of the UA Center for Rural Health.

The drop in ACA enrollment, combined with anticipated drops in Medicaid coverage in the state in 2027, could fuel an increase in the number of uninsured people, which could in turn spike uncompensated care and drain hospital coffers, Derksen said.

Medicaid work requirements in HR 1 may fuel coverage losses in 2027

HR 1, also known as the One Big Beautiful Bill Act, mandates work requirements and twice yearly coverage renewal, rather than annual renewals, for what's known as the “adult expansion” population in Arizona’s Medicaid program. Medicaid is a government health insurance program for people who are low income and who have disabilities.

Arizona’s Medicaid agency, the Arizona Health Care Cost Containment System, or AHCCCS (pronounced “access”), enrolls about 1.8 million state residents. Agency officials estimate 429,199 of them are part of the adult expansion population that will be affected by new requirements under HR 1. The expansion population includes adults without dependent children and a category of adults that was added to AHCCCS in January 2014 as part of Medicaid expansion allowable under the ACA.

Those 429,199 Arizonans, starting on Jan. 1, 2027, will need to prove they are working at least 80 hours per month or doing another qualifying activity, like job training or education, to avoid losing coverage. There are some exemptions, among them being American Indian or being a former foster youth under the age of 26.

This article was originally published by Arizona Republic