Millions of Americans are going uninsured this year since ObamaCare premiums went up since Biden era subsidies expired. This was the contentious issue that led to Democrats shutting down the government for 42 days last Fall. The Biden Administration temporarily increased the government subsidies during the Covid pandemic but they expired at the end of 2025.

Anna Wilde Mathews, writing for The Wall Street Journal, says nearly one in 10 people with Affordable Care Act healthcare plans (ObamaCare) last year dropped health insurance altogether, after premium costs rose sharply according to a new survey.

Most of those who remained in ACA plans reported larger out-of-pocket healthcare expenses in the form of higher copays, coinsurance or deductibles, according to the survey from health-research nonprofit KFF. About one-sixth of those who still have ACA coverage, or 17%, weren’t sure they would be able to afford their new premium payments for the entire year, indicating more people might drop insurance as the year goes on.

The survey is the broadest look yet at the fallout from the end of enhanced ACA subsidies, which lapsed at the start of this year, increasing premium bills for millions of enrollees. The higher healthcare costs have forced many ACA policyholders to make hard choices as grocery and gas prices are also rising.

The survey was conducted by Kaiser Family Foundation, a California based company associated with Kaiser Permanente, the large managed healthcare organization. The survey found that the most common reason cited for dropping insurance was cost.

“Not only is there significant coverage loss, but there could be more to come,” said Cynthia Cox, a senior vice president at KFF. She said the survey results were “about on target” compared with what had been expected. Of those surveyed, 69% still have ACA policies this year. Beyond the 9% who said they are uninsured, 22% of respondents now have some other type of coverage, such as Medicare or employer-sponsored insurance.

If you’re not careful, you might conclude that the solution to this problem is increasing government subsidies. That’s certainly the Democrats priority. But throwing good money after bad is never a good solution. The solution is lowering the cost of the premiums by making substantial changes in the system that save money.

There are other problems with this survey. Take the example they give in the article. Kelly Rose, 59 years old, who lives near Orlando, Fla., became uninsured this year because she couldn’t pay the roughly $1,700 monthly bill to keep the ACA plan she had in 2025. “It’s more than my mortgage,” she said. The cost is a huge jump compared with 2025, when she got help from a subsidy, she said.

Though her job at a bank offers health insurance, she said she missed the enrollment window in the fall because she had planned to keep the ACA plan, not realizing how much it would cost. In other words, she had a chance to get employer-sponsored insurance and she passed on that expecting ObamaCare to be cheaper. When government healthcare undermines the private system, as it did in this case, everybody loses including the patient and the taxpayers.

I have written on the flaws in the ACA before (Missteps to Fixing Healthcare) and this article simply illustrates the problems. It doesn’t make the argument for increasing government subsidies.

The cost of Medicare is going up, especially for those seniors enrolled in Medicare Advantage plans. Why these plans in particular?

Christopher Weaver and Anna Wilde Mathews, writing in The Wall Street Journal, tell us that the average American senior’s Medicare premiums last year were about 10% higher, or more than $200 annually, because of alleged overpayments to private Medicare Advantage plans, congressional investigators found. Medicare Part B premiums that most seniors pay were partly pushed up by controversial health-insurer practices such as adding diagnoses to trigger higher payments, according to the Joint Economic Committee, a bipartisan group of lawmakers that advises Congress on financial matters.

Overpayments to Medicare Advantage insurers increased Part B premiums by $13.4 billion in 2025, the committee said, a cost mostly borne by seniors. Both those enrolled in Medicare Advantage plans and those in standard Medicare faced those additional costs.

This story was first reported by these same authors in 2024 and I posted a blog concerning this called Home Nursing Visits Bilking Medicare for Billions. They discovered that insurance companies were instructing their home nurses who visited Medicare Advantage patients to add diagnoses to the patient record whenever possible to increase payments from the federal government. Later, in early 2025, they also reported similar activity by doctors working for the UnitedHealth Group. They revealed that the insurer had prepared checklists for potential diagnoses even before the patients were examined, as if the doctors needed to be educated!

Why would they encourage adding diagnoses?

More diagnoses make for higher scores—and larger payments. A Wall Street Journal analysis found sickness scores increased when patients moved from traditional Medicare to Medicare Advantage, leading to billions of dollars in extra government payments to insurers.

This latest report from these investigative journalists shows that more diagnoses means more money for insurance companies and higher payments from Medicare and higher premiums from seniors.

Lawmakers and government investigators have been probing how insurers’ billing practices have contributed to Medicare Advantage costs. A congressional watchdog found Medicare Advantage costs the federal government more than traditional Medicare, partly because of insurers’ billing practices. The insurers are paid more to cover enrollees who have more health conditions, and they can boost their reimbursement by recording more diagnoses.

The average Medicare beneficiary paid $212 extra in 2025 due to Medicare Advantage “overpayments,” the committee said. Medicare recipients with higher incomes pay higher premiums, and for those people, the committee said, the extra payments could be as high as $682 a year.

In an interview recently, Medicare agency administrator Mehmet Oz said of Medicare Advantage insurers, “I don’t think they’re as overpaid as has been reported.” Yet, he said, the Medicare Advantage payment system had at times created the wrong incentives and “we should change the rules.”

ObamaCare is a train wreck. I wrote a book about it by the same name in 2014. Since then, it has only gotten worse. Costs continue to rise and the Democrats keep pushing more government subsidies to make it more affordable. This is throwing good money after bad. What can we do about it?

John C. Goodman, healthcare economist, has some suggestions. He says that Congress is making three missteps to fixing the problem:

• On the buyer side, we have been trying to force people to buy insurance they would never buy with their own money.
• On the seller side, we have been trying to force insurers to enroll people they do not want to enroll.
• On both sides of the market, we have created inverse incentives that cause costs to be higher and quality lower than would otherwise have been the case.

Goodman explains: “The difficulty of trying to force people to buy something they don’t want to buy became evident in year one. Fast food restaurant chains were forced to offer their employees insurance that was so comprehensive, we were led to believe it would cover the cost of a million-dollar premature baby. For self-coverage, employees had to pay 9.6 percent of wages, and out-of-pocket spending could be as high as $6,350. To cover a spouse and children, workers were asked to pay the full premium.”

The problem is people have no interest in coverage for low-probability medical events that could cost a million dollars. They figure they’ll never happen and if they do someone else will end up paying the bill.

Goodman tells us In the years that followed, Obamacare insurance became increasingly unattractive. Average premiums for marketplace plans have grown twice as fast as they have in a typical employer plan.  Last year, the average deductible in the most commonly selected exchange plan was $4,572, more than twice as high as in an average employer plan ($1,787). The maximum out-of-pocket expense in the average exchange plan was also more than twice as high ($9,450) as in the average employer plan ($4,750).

The current controversy concerns a second tier of federal tax subsidies for marketplace insurance. Although created during the COVID-19 era, the real reason for these enhanced subsidies was not COVID-19. The unsubsidized part of the market was in a death spiral. The healthy were dropping out in droves. As the pool became sicker, premiums kept rising to cover the higher cost.

What’s the solution?

Let people buy the insurance they want! KFF (formerly Kaiser) says that premiums could be cut in half for most people if they could buy the type of insurance that was generally available before there was Obamacare.

What if they choose a plan that fails to cover an unexpected problem (like substance abuse) that is required coverage in the Obamacare exchanges? Let them immediately switch to a silver exchange plan that meets that need. Keep Obamacare insurance in place for people who need it, when they need it. But let most families have cheaper and better insurance if it meets their current needs.

On the seller side, it should come as no surprise that insurers are not anxious to enroll people whose premium payments are well below the expected cost of their care. To solve this problem, look at the Medicare Advantage (MA) program. This is the only place in our health care system where doctors who discover a change in a patient’s condition (say the emergence of cancer) can send that information to the insurer (in this case, Medicare) and receive a higher premium payment to cover the expected increase in treatment costs. The result is MA plans welcome patients with costly health problems – patients that insurers in other market try to avoid.

Lastly, Goodman tells us there are perverse incentives in some plans. Because subsidized premium payments are capped as a percent of the enrollee’s income, most enrollees bear no personal cost when they choose a more expensive health plan. The extra cost is paid by the taxpayers. And since enrollees are not price sensitive, insurers don’t really compete on price.

To solve this problem, consider the federal employees’ health benefits program (the one Congress gets to use!) The employer subsidy is a fixed amount, independent of the employee’s health plan selection. If the employee chooses a more expensive plan, the extra cost comes out of the employee’s pocket, not some other pocket. Because this system makes buyers price sensitive, insurers in this market compete on price and quality just like they do in other insurance markets.

These solutions are not that difficult to implement, but Congress has a problem: Democrats won’t admit that ObamaCare has a problem – because they created it! Like an alcoholic who can’t get help until he admits he has a problem, Democrats won’t work with Republicans to fix ObamaCare until they face up to the failures of the healthcare system they created.