US Crackdown on Obamacare Raises Costs for Insurers and Consumers

The US government's crackdown on Obamacare health insurance has removed 760,000 enrollees who were deemed to be either non-existent or fraudulently signed up by brokers. This move is expected to raise prices for consumers and insurers in the remaining months of 2026 and 2027.

The Affordable Care Act created income-based government-subsidized health plans for individuals, with 19 million people currently enrolled. However, millions have dropped out this year after extra COVID-19 pandemic subsidies expired.

According to Matt McGough, a policy expert at KFF, the premium rates for 2027 have already been filed and approved. He said that the removal of low-medical-use enrollees will lead to a sicker mix of patients, which could eat into profits for insurers like UnitedHealth and Centene.

UnitedHealth shares fell 2.6% in the week since the announcement, while Centene, Molina, and Elevance shares fell by 1.5%, 6.5%, and 4.2% respectively.