Understanding the 5 Million Drop in Medicaid and ACA Enrollment

More than 5 million fewer people are enrolled in Medicaid, CHIP, or Affordable Care Act marketplace plans than last year. For families who depend on these programs for doctor visits, prescriptions, hospital care, mental health treatment, and children's coverage, that's a serious warning sign.

The drop traces to two major changes: new Medicaid rules in the 2025 federal budget law and the expiration of enhanced ACA subsidies that helped millions afford monthly premiums. Many of these changes are still taking effect, so more people could be affected in the months ahead.

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Why did enrollment drop?

For ACA marketplace plans, cost is the main driver. When enhanced premium tax credits expired, many people saw their monthly premiums spike. Some switched to cheaper plans with higher deductibles. Others dropped coverage entirely.

For Medicaid and CHIP, the picture is more complicated. Medicaid eligibility is based on income, household size, age, disability status, pregnancy, and state rules — but people can lose coverage even when they still qualify if they miss renewal paperwork or can't complete a new requirement on time.

The 2025 federal budget law added new Medicaid work reporting requirements, more frequent eligibility checks, and new limits on how states fund their programs. Many of these rules are just beginning to roll out.

Who is most affected?

Those most likely to feel these changes include adults in Medicaid expansion, people who buy ACA coverage independently, self-employed and gig workers, parents using CHIP, and people with low or fluctuating income. Immigrants and mixed-status families may also be avoiding enrollment due to concerns about immigration enforcement — a dynamic researchers call a "chilling effect."

Some states have seen especially sharp drops. Medicaid and CHIP declines have been most pronounced in Indiana, Louisiana, Arizona, Rhode Island, and Delaware. ACA drops have been steepest in North Carolina, Ohio, West Virginia, Indiana, and Delaware.

Even if your state isn't on that list, watch your mail and online accounts. A missed notice can create a coverage gap.

What about Medicaid work requirements?

This is the biggest policy change for many people. Some states — including Nebraska — have already implemented work requirements. Most states are expected to follow in January 2027.

Under these rules, certain adults must show they are working, in school, volunteering, or participating in job training for at least 80 hours per month. Exemptions may apply for people who are pregnant, medically frail, disabled, or caring for certain family members, but exact rules vary by state.

The requirement isn't just about whether you work — it's about whether you can prove it the way your state requires. Paperwork, deadlines, and online forms matter.

Can children lose coverage too?

Yes. Children aren't the target of work requirements, but they can lose coverage if a household misses renewal paperwork or if state systems create new barriers. Parents should watch for renewal notices even if their child has been covered for years.

If your child loses Medicaid or CHIP, options remain. CHIP has different income limits, and some children qualify even when parents don't. Losing Medicaid or CHIP also typically triggers a Special Enrollment Period for ACA marketplace coverage.

What should I do if I lost coverage?

If you lost Medicaid or CHIP: Find out why. If it was a paperwork issue, you may be able to reopen your case by submitting the missing information. If your income is now too high, check whether you qualify for an ACA plan. Ask whether your children still qualify for CHIP — income limits for children are often higher than for adults.

If your ACA plan got too expensive: Don't assume you have no options. Log in and compare plans — a different metal level or insurer may lower your payment. Update your income estimate if your situation changed. If you recently lost job-based coverage, had a baby, moved, or experienced another major life change, you may qualify for a Special Enrollment Period.

How do I protect my coverage?

Make sure your Medicaid office or marketplace has your current address, email, and phone number. Open every notice, even routine-looking ones. Check your online account monthly. Save pay stubs, school records, volunteer documentation, and medical paperwork that could help prove eligibility.

If you receive a notice you don't understand, don't wait — contact your state Medicaid office, ACA marketplace, a local navigator, legal aid, or a community health center.

Can I appeal if my coverage was ended?

Yes. If you believe your coverage ended in error, you have the right to appeal. Your notice should explain why coverage ended and how long you have to respond — deadlines can be short. In some Medicaid cases, you may be able to keep coverage during an appeal if you request it before the deadline, though rules vary by state.

The bottom line

People are losing coverage because costs went up and rules are changing. But losing coverage doesn't always mean you're out of options. Check whether you qualify for Medicaid, CHIP, an ACA marketplace plan, or a Special Enrollment Period — and if you get a notice, respond quickly.