Why the ACA needs young people — and the looming “death spiral” for health insurance

Chloe Chalakany has a lot at stake in the health care battle at the heart of the government shutdown.

Chalakani runs a small cooking business with her partner in the coastal city of Thomaston, Maine. As temperatures drop and the busy peak tourist season ends, she is completing her list of administrative tasks in the fall, including registering for health insurance. It’s used CoverME.govMaine’s Affordable Care Act marketplace, also known as Obamacare.

Its options for 2026 look bleak.

"My premium is already $460 per month, and that’s for the highest deductible plan out there," She says. She is 31 years old and in good health. Additional financial assistance with insurance premiums — in the form of enhanced tax credits — expires in December, and prices are rising.

"I don’t plan to get insurance next year;" She says. "I won’t do that, I’ll pay out of pocket."

The prospect of young people dropping out of the Affordable Care Act’s markets worries health policy experts — not just because of the personal risks they take in being uninsured, but because of the impact that millions of people making the same decision could have on the entire health system.

How does insurance work?

Health insurance markets only work when there are lots of people pooling their resources — young and old, relatively healthy and otherwise.

"You need people to pay into the insurance system when they are healthy so they can get out when they get sick," He explains Cynthia Cox From KFF, a nonpartisan health research organization.

Younger, healthier people tend to pay more into the system than they consume in health care. Older and sick people often consume more health care than they pay for. This dynamic creates a stable insurance system.

Right now, the Affordable Care Act markets appear to be pretty balanced. register 24 million people They are registered, and brokers report that their clients are generally satisfied with their plan options and find the premiums affordable.

That may be about to change. Premium costs It will explode soon For many consumers because some federal subsidies that kept these monthly costs low have ended. It is the issue at heart Current federal shutdown Democrats want to extend the subsidy, and Republicans say these negotiations should not be part of the debate over government funding.

The terrifying “death spiral”.

If Congress does not extend federal benefits set to expire in December, the Congressional Budget Office estimates it will 4 million people They will become uninsured in the next few years.

People who choose not to be insured will likely be younger and healthier, Cox says. "Because sicker seniors will be more motivated to maintain their coverage, even if it means paying more each month."

It’s easy to find people who fit these profiles. Chalakany, a 31-year-old in Maine, plans to skip coverage, while a 64-year-old in West Virginia needs expensive medications NPR says She’s saving money now to pay $2,800 a month to cover her costs next year.

"If you only have patients who buy health insurance plans, the average cost of that plan will be very high." says Cox. "The concern is that the least sick person in that group will drop their coverage because it becomes unaffordable, and then the following year, the least sick person in that group Which The group may fall they Coverage as it becomes unaffordable and on and on."

This is called a Death spiral She explains that for the insurance market. "Insurance premiums become so high that only the sickest people are enrolled, and eventually insurance companies won’t want to participate in a market like this—they won’t work."

Although it is a A relatively small portion For Americans who buy these plans, it could hurt everyone, regardless of how they are insured. If more people in the country become uninsured, it will be difficult for them to access hospitals and health care.

"If hospitals face a lot of financial pressure because there are a lot more uninsured patients coming through their doors, they may start to change the services they provide," She says. "They may have to close the maternity ward. Maybe they’ll have to close their doors completely."

This is true It’s starting to happen in Maine And other parts of the country, where health care markets are under financial pressure. This pressure is growing with looming cuts to Medicaid under President Trump’s budget law that are expected to increase the number of uninsured people by millions more.

Registration opens on November 1

Weeks after the shutdown, it appears that federal lawmakers have not begun negotiations to overcome it Inertia. The two sides have reached an impasse since October 1.

Meanwhile, registration will open on November 1 — In Idaho, it’s already begun. Unless Congress acts quickly, enrollees will likely be in for a shock when they log in to find a plan for 2026. On average, consumers will have to Double payment Next year, the same plan.

Chloe Chalkani says she plans to be uninsured even though she knows car accidents and serious illnesses can happen. "In the event of a disaster, I’d probably say, “Great, I should have gotten insurance.”" She says. "But at this point, I don’t have the financial capacity to plan that."

If lawmakers overcome the impasse and extend the enhanced subsidy so that premiums stay about the same, she says she may reconsider her plan to eliminate health insurance in 2026.

Copyright 2025, NPR