A health insurance ‘death spiral’ looms if young people drop out as prices spike : Shots

Chloe Chalakani has a lot at stake in the health care fight at the heart of the government shutdown.

Chalakani runs a small culinary business with her partner in the coastal town of Thomaston, Maine. As the temperatures drop and the height of her busy travel season comes to an end, she gets to work on her list of fall administrative tasks, including filing for health insurance. She uses CoverME.govMaine's Affordable Care Act marketplace, also known as Obamacare.

Its prospects for 2026 look bleak.

“My insurance premium is already $460 a month, and that’s at the highest deductible available,” she says. She is 31 years old and quite healthy. Additional financial aid in the form of bonuses – in the form of expanded tax breaks – expires in December, and rates are rising.

“I don't plan on getting insurance next year,” she says. “I’m just not going to do it—I’m going to pay out of pocket.”

The prospect of young people leaving the ACA markets worries health policy experts — not only because of their personal risk of remaining uninsured, but also because of the effect that millions of people making the same decision could have on the entire health care system.

How insurance works

Health insurance markets only work when many people pool their resources—young and old, relatively healthy and not.

“You need people to pay into the insurance system when they're healthy so they can get insurance when they get sick,” explains Cynthia Cox KFF, a nonpartisan health research organization.

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

Currently, the Affordable Care Act markets appear to be fairly balanced. Record 24 million people are enrolled, and brokers report that their clients are generally happy with their plan options and find premiums affordable.

Perhaps the situation will change soon. Premium expenses will explode soon for many consumers due to the expiration of some federal subsidies that had kept monthly costs low. This is the underlying problem current federal shutdown — Democrats want the subsidies to be extended; Republicans say these negotiations should not be part of the government funding debate.

The terrible “death spiral”

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

People who choose to go without insurance are likely to be younger and healthier, Cox said, “because sicker and older people will be more motivated to keep insurance, even if it means paying a lot more every month.”

It's easy to find people matching these profiles. Chalakani, a 31-year-old man from Maine, plans to skip coverage, and a 64-year-old man from West Virginia needs expensive medications. tells NPR She's now saving up to pay $2,800 a month for insurance next year.

“If only sick people buy health plans, the average cost of that plan will be very high,” Cox says. “The concern is that the least sick person in this group will give up insurance because it becomes unaffordable, and then next year the least sick person in What the group may fall their coverage because it becomes unavailable, and so on.”

That's what it's called death spiral for the insurance market, she explains. “Premiums become so high that only the sickest of the sickest people participate in them, and eventually insurance companies simply won’t want to participate in that market—it just won’t function.”

Although this relatively small part Americans who purchase these plans could potentially harm everyone, regardless of how they are insured. If more people in the country remain uninsured, it will worsen access to hospitals and health care.

“If hospitals face greater financial strain because they have many more uninsured patients coming through their doors, then they may begin to change the services they offer,” she says. “They may have to close the maternity ward. They may have to close altogether.”

it's already started happening in Maine and other parts of the country where health care markets are under financial pressure. And that pressure is intensifying with looming Medicaid cuts under President Trump's budget law, which is expected to increase the number of uninsured people by millions more.

Open registration is November 1st.

Weeks after the shutdown, federal lawmakers appear to have failed to begin talks to overcome deadlock. The two sides have been at an impasse since October 1.

Meanwhile, open registration will take place on November 1st. it's already started in Idaho. Unless Congress acts quickly, members will likely be shocked by the cost when they log on to look up the 2026 plan. On average, consumers will have to pay twice next year according to the same plan.

Chloe Chalakani says she plans to forgo insurance, even though she knows car accidents and serious illnesses could happen. “If there's a disaster, I'll probably say, 'Wow, I should have gotten insurance,'” she says. “But at the moment I don’t have the financial ability to plan for it.”

If lawmakers break the impasse and extend expanded subsidies to keep her premiums roughly the same, she says she may reconsider her plan to phase out health insurance in 2026.