As the populist left calls for Medicare-for-all, Democrats’ signature health law is faltering

Published on: Aug 17, 2026, 20:42:36 IST

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“HEALTH-CARE reform…is the great unfinished business of our society,” observed Ted Kennedy, a Democratic senator, before he died in 2009. America was the only large rich country that did not have universal health care. Instead, its system was a patchwork. The old, poor and disabled were covered by government programmes. Most working-age Americans got insurance through their jobs. But pity those without such coverage, who had to navigate the fragmented, expensive and often bewildering individual insurance market.

The Affordable Care Act, passed in 2010, tried to keep America’s system more or less intact, but expand insurance for the poor and make it easier for individuals to buy coverage, through new “exchanges” where they could compare and buy plans. Obamacare was never enough for the likes of Bernie Sanders, a leftist senator who preferred universal coverage. Those calls are now being amplified by a new generation of Democrats such as Abdul El-Sayed, Michigan’s Senate nominee, who has made Medicare-for-all a central part of his campaign. Back in 2010 even Obamacare’s most fervent advocates acknowledged, in private, that it was an imperfect bandage, particularly for those on the individual market. New data show how that bandage is unravelling.

To help expand coverage for individuals, Obamacare gave subsidies to help poor and middle-class Americans cover the cost of plans on the new exchanges. But the mandate to buy insurance was effectively eliminated in 2019. Uptake was limited until 2021, when Congress made subsidies more generous for those who already qualified and available to some who hadn’t. Enrolment then nearly doubled by 2025. Democrats sought unsuccessfully to extend the extra financial assistance, which would have cost about $35bn this year—about as much as the Iran war so far, according to the Pentagon’s estimate. Now that those subsidies are diminished, the individual market looks more frail than ever.

Figures from insurers and state marketplaces show the effect of the rollback. The number of people buying coverage through the exchanges has already fallen to 19.2m from 21.8m last year. The Congressional Budget Office (CBO), a non-partisan scorekeeper, reckons that by the end of this year it is likely to fall below 17m. Of those who dropped off the exchanges, most appear to be going without coverage.

The leavers tend to be more healthy than those who remain on the exchanges, which means the latter are more costly to insure. Combine a sicker patient population and general inflation in health costs, and the result is higher premiums: this year the average payment increased from $113 to $178 per month. To avoid the new costs, many enrollees are buying skimpier plans. In the past year the average amount an individual must pay out of pocket before insurance kicks in has jumped by nearly 40%, to $3,800.

This has raised fears of an adverse-selection feedback loop, where higher premiums and skimpier plans make insurance still less attractive, particularly to healthier customers. As they leave the exchanges, premiums are driven higher yet. Insurers have proposed a median premium increase of 15% for 2027, according to KFF, a health-policy think-tank. These increases must be reviewed by state regulators. If they materialise, pre-subsidy premiums will have grown by more than a third since 2025. The KFF imagines a 40-year-old in Indiana earning $65,000. In 2025, with subsidies, her monthly premium was $316. This year it is $477. Next year it will probably be close to $550.

Does this threaten the viability of the exchanges? The CBO estimates that by 2028, 10m fewer Americans will get insurance on the marketplaces compared with last year. But they will probably avoid collapse, says Ben Sommers, a health economist at Harvard. The remaining subsidies should convince enough people to remain enrolled. “The changes basically get us back to what the marketplace looked like from 2016 to 2019,” says Mr Sommers. The exchanges will be smaller, with fewer participating insurers and sicker customers.

There will also be more people without insurance. Evidence suggests that they will put off needed treatment, like certain prescription medicines and surgeries. “We know that from a decade or more of research on the Affordable Care Act,” explains Mr Sommers. Hospitals must still provide emergency care for them, even if they cannot pay. In May unpaid care was up by an average of 16% compared with a year earlier, according to Kaufman Hall, a consultancy. HCA Healthcare, a for-profit hospital group, reckons the new uninsured population will cost the chain at least $1bn in operating profits this year, equivalent to about 15% of predicted net income. The experience shows “people generally want health insurance,” says Cynthia Cox of KFF. “It’s just a question of whether they can afford it or not.”

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