Obamacare enrollment is plunging as costs soar, pushing down stocks like Centene

By Jaimy Lee

Americans are opting out of the Affordable Care Act, and health insurance companies are taking a financial hit

Affordable Care Act tax breaks expired at the end of 2025.

Centene's stock tumbled 16% on Tuesday afternoon after the health insurer confirmed that it expects about 40% of its Obamacare members to opt out of coverage by the end of the year.

In remarks at the Barclays Annual Healthcare Conference in New York on Tuesday morning, Centene (CNC) CEO Sarah London said the company had expected the drop in enrollment in Affordable Care Act plans this year to be in the "high teens" up to the "mid-30s."

Centene's Obamacare enrollment is already on track to decline by 36% in the first quarter of 2026. The company expects to have 3.5 million people enrolled in ACA plans at the end of the first quarter, according to London, compared with the 5.5 million members it had on Dec. 31.

"The membership trajectory is tracking very nicely in line with our expectations, including that big step-down from January to February," she said.

It was one of the first corporate disclosures showing declining participation in the ACA - and it came from the largest issuer of health plans sold there. The enhanced tax credits that made Obamacare plans more affordable in recent years expired at the start of this year, prompting widespread concern about the affordability of health insurance and the sustainability of the ACA marketplace.

About 1.2 million fewer people in the U.S. enrolled in ACA plans for 2026, according to figures released by the Centers for Medicare & Medicaid Services on Jan. 28. The agency does not traditionally provide updates on those figures until the summer; however, the leaders of several state health-insurance marketplaces have said they expect more Americans to drop their healthcare coverage by April or May once they realize how expensive the plans have gotten.

At the same time, some people who rely on the ACA for health coverage have downgraded their plans, in some cases picking less expensive Bronze plans for 2026 after having selected Silver plans in years past. London noted that Centene's Bronze plans have primarily been used by younger, healthy people, but as the costs of health insurance have risen, there is a broader mix of enrollees signing up for Bronze plans. In February, Centene said it expects that Bronze membership will make up 30% of its ACA enrollment this year, up from 19% to 24% in years past.

"There are a number of members who have bought down into Bronze because they don't want to walk away from coverage," London said, "but they are looking for more affordable options."

On Tuesday, Centene's stock suffered its largest percentage decrease since July 2. It was the worst performer in the S&P 500 SPX.

The insurer's shares are down 11.5% so far this year as it grapples with significant changes to its business, including declining Obamacare enrollment and what could be a lower-than-expected rate increase for Medicare Advantage in 2027.

-Jaimy Lee

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03-10-26 2226ET