Enrollment in Affordable Care Act (ACA) plans in Alabama is shrinking, with recent national disenrollment announcements further compounding a decrease in coverage that experts say could harm the state’s health and erode trust in the program. Last week, the Trump administration announced plans to disenroll an additional 760,000 Americans from ACA plans nationwide over claims of fraud. This follows 95,000 Alabamians, approximately 23% of the state’s enrollees, who already exited the marketplace at the end of 2025 after enhanced premium tax credits expired.
The combination of potential disenrollments stemming from fraud claims and healthy individuals being removed from coverage may undermine confidence in the Affordable Care Act, according to policy analysts. KFF Policy Analyst Matt McGough stated in a Tuesday interview that a continued perception of fraud could deter future sign-ups for health insurance. Debbie Smith, director of Alabama Arise’s initiative Cover Alabama, also commented in a Tuesday interview that while rooting out fraud is important, broad disenrollments are detrimental to society. "It’s never good when a bunch of people get disenrolled from health coverage," Smith said, emphasizing the negative impact regardless of the cause.
Smith highlighted the crucial role of healthy people in the healthcare system, explaining that they are essential for spreading risk among enrollees. She noted that without healthy individuals to balance the risk pool, premiums tend to rise because primarily sick individuals utilize coverage, creating an imbalance. According to a March study by KFF, Americans under 34 constitute 44% of the insured population but account for only 21% of total healthcare spending. McGough reinforced this point, stating that individuals who contribute more to the risk pool than they claim in a given year are integral to keeping health insurance affordable.
The Trump administration’s planned disenrollments largely target unauthorized enrollments by "bad actors" in insurance brokerage, according to the U.S. Centers for Medicare and Medicaid Services (CMS). CMS data indicates that an estimated 80% of enrollments are facilitated by brokers. McGough noted that many people are accustomed to using brokers for other types of insurance, leading them to seek similar services for health coverage. CMS attributed some disenrollments to individuals being enrolled without their knowledge by brokers, particularly in cases where enrollees had not filed an insurance claim within a year of being insured. An interim final rule from CMS stated that while "zero utilization is not, on its face, indicative of an unauthorized enrollment" for healthy individuals, an 11 percentage point difference in zero utilization between on-Exchange and off-Exchange plans for Plan Year 2024 "may be indicative of unauthorized enrollment." This interim final rule is the mechanism CMS intends to use for these disenrollments.
State-level data regarding these recent disenrollments over fraud claims is not yet available; a request for this information was sent to CMS on Friday. McGough cautioned that it is currently difficult to assess the potential "collateral damage" of these disenrollments, given that the public does not have access to the personal data held by CMS. He suggested that people legitimately enrolled through brokers could unknowingly lose their health insurance coverage. McGough further stated that only the brokers involved in illegal enrollments might truly understand the extent of the fraudulent activity.
Before the recent changes, ACA enrollment in Alabama saw consistent growth from 2020 to 2025. This increase was driven by enhanced premium tax credits, which reduced insurance costs and extended eligibility for tax credits through the marketplace to those earning more than 400% of the federal poverty level. For example, a family of four earning $132,000 annually or a family of two earning $86,500 annually became eligible. By 2025, over 427,000 Alabamians were enrolled in ACA plans, a significant rise from 143,000 five years prior. However, these enhanced tax credits expired at the end of 2025, directly leading to the disenrollment of 95,000 Alabamians. As of early 2026, roughly 19.2 million Americans are actively enrolled in ACA marketplace health plans, according to the Department of Health and Human Services website.
Smith suggested that the federal navigator program, designed to assist individuals in shopping for health plans without any conflicts of interest, could help prevent issues related to "bad actor" brokers. However, funding for this program was reduced last year, with CMS citing that navigators "are not enrolling nearly enough people to justify the substantial amount of federal dollars previously spent on the program."