National ACA disenrollments could impact trust in programs, overall Alabama state health

As enrollment in the Affordable Care Act in Alabama drops, recent threatened disenrollments could impact the state’s health as a whole, experts say.

Enrollment in the program, also known as Obamacare, rose steadily from 2020 to 2025 due to enhanced premium tax credits that lowered insurance costs and made those making more than 400% of the federal poverty level – $132,000 per year for a family of four or $86,500 per year for a family of two – eligible for tax credits through the marketplace. By 2025, more than 427,000 Alabamians were enrolled in ACA plans, up from 143,000 five years previous. 

Those tax credits expired at the end of 2025, leading to 95,000 Alabamians – about 23% of the state’s enrollees – to exit the marketplace. 

The Trump administration last week announced the planned disenrollment of 760,000 more enrollees over claims of fraud. 

Although state-level data of the disenrollments are not available yet, experts say that a combination of not understanding what fraud looks like within the marketplace and healthy people being disenrolled because they have not filed a claim undercuts trust in the program as a whole. 

“If there’s this continuing idea of fraud in the marketplace, we might not see people sign up as much if they distrust the type of insurance that they’re getting,” said KFF Policy Analyst Matt McGough in an interview Tuesday. 

A request seeking the state-level data and any additional information about the disenrollments was sent to U.S. Centers for Medicare and Medicaid Services (CMS) on Friday. 

While fraud and misuse of ACA does exist, Debbie Smith, director of Alabama Arise’s initiative Cover Alabama, said in an interview Tuesday that broad disenrollment is not good for the broader society. 

“I think it’s really important that we root out fraud, and that if there is indeed fraud that is definitely something that we want to take care of,” Smith said. “But it’s never good when a bunch of people get disenrolled from health coverage, whether it’s from the announcement last week or people just losing their health insurance and coverage in general because of the prices going up dramatically last year because of the enhanced subsidies expiring.”

Roughly 19.2 million Americans are actively enrolled in ACA marketplace health plans as of early 2026, according to the Department of Health and Human Services website.

According to the CMS, most of the disenrollments are unauthorized enrollments by “bad actors” in insurance brokerage. An estimated 80% of enrollments are supported by brokers. 

McGough said that many people are used to using brokers for other types of insurance, so they gravitate towards the service for health insurance as well. 

“I think time is going to tell to truly understand how successful this action was in combating the fraud that’s out there,” McGough said. “Potentially the only people that know who was fraudulently enrolled or not are the brokers who were acting illegally to enroll these people.”

McGough said that it is hard to determine the collateral damage of the disenrollment because the public does not have access to the personal data that CMS does.

“It’s really not clear at this point if there is going to be any collateral in trying to fight this fraud, so to speak. Potentially there are going to be people who are legitimately enrolled who go to the marketplaces every year, or go to their broker, and they are enrolled and they think they have health insurance coverage, and now they don’t,” McGough said. 

The administration also claimed that some enrollees had not filed an insurance claim within a year of being insured, which CMS attributes to individuals being enrolled without their knowledge by brokers. 

“While zero utilization is not, on its face, indicative of an unauthorized enrollment (healthy individuals may go an extended period without filing a claim, for example), onExchange plans purchased through the Federal platform were more likely than unsubsidized, off-Exchange plans to have zero utilization in Plan Year 2024,” a CMS interim final rule from last week reads. “This 11 percentage point differential between on-Exchange and off-Exchange zero utilization is notable and may be indicative of unauthorized enrollment (since consumers enrolled in plans without their knowledge or consent would not be expected to utilize those plans).” 

The interim final rule is what CMS will use to disenroll individuals. 

Smith said that healthy people are crucial to the healthcare system’s foundation, recalling that she rarely used her health insurance when she was in her 20s.

“The whole point is to spread the risk among the thousands of people who are enrolled in coverage. If you don’t have healthy people to balance it out, then premiums just continue to go up and up and up because there’s only sick people using the coverage, and it’s not a very good balance,” she said. 

According to a March study by KFF, Americans under 34 make up 44% of the insured population, but only 21% of total healthcare spending. 

“People who pay more into the risk pool than they are getting out in a given year, like through claims, are integral to keeping health insurance affordable,” McGough said. 

Smith said that the federal navigator program, a service that helps individuals shop for health plans with no “skin in the game,” would help prevent some of the back actor brokers that have led to the mass disenrollment. However, the program’s funding was cut last year because they “are not enrolling nearly enough people to justify the substantial amount of federal dollars previously spent on the program.”

“If we really care about making sure that people aren’t fraudulently enrolled, then we need to be investing in programs like that that don’t have skin in the game,” Smith said.