January 2026 in review: ACA subsidies lapse, MA rates and new GME slots

Coverage losses moved from forecast to fact, Medicare Advantage plans got a tight rate proposal, and CMS handed out new residency positions.

January opened with the enhanced ACA premium tax credits gone and closed with early evidence of what that means for hospital payer mix. Washington also signaled a tougher year for Medicare Advantage plans, and CMS distributed new graduate medical education capacity.

ACA subsidies expire, and the enrollment and credit picture shifts

The enhanced subsidies ended on Dec. 31, 2025. In January the House passed a three-year extension by a 230-196 vote, with 17 Republicans in support, but the Senate had already blocked earlier attempts and the bill’s path there remained unclear.

CMS’s open enrollment snapshot, released Jan. 28, counted roughly 23 million plan selections, including about 3.4 million new consumers. KFF put the year-over-year decline at about 1.2 million sign-ups and stressed that plan selections are not paid coverage; the fuller picture arrives with effectuated enrollment data this summer.

Fitch Ratings flagged the credit side. It named 12 states where nonprofit hospitals face elevated risk, including non-expansion states such as Georgia, Tennessee and Alabama, and expansion states with thin-margin rural networks such as West Virginia and Montana. Fitch expects self-pay and charity care to climb unevenly, concentrated from mid-year into the third quarter for hospitals with heavy marketplace exposure.

CMS proposes a nearly flat 2027 Medicare Advantage rate

On Jan. 26, CMS released its 2027 MA advance notice, projecting a net average payment change of 0.09%, or about $700 million. The proposal would also stop counting diagnoses from unlinked chart reviews and from audio-only encounters in risk scores. Comments were due Feb. 25, with final rates by April 6.

For providers, a lean MA year typically shows up as tighter contract talks, more prior authorization pressure and slower payment. Health systems with large MA volumes should model downside scenarios before 2027 negotiations begin.

New Medicare-funded residency slots awarded

CMS awarded 400 new Medicare-funded residency positions to more than 130 teaching hospitals under two congressional programs. Priority went to rural hospitals, shortage areas, states with new medical schools and hospitals over their training caps, and at least half of one program’s slots are reserved for psychiatry. Individual awards were small, mostly under ten positions, but they compound over time as residents often practice near where they train.

• Coverage: Expect payer mix erosion to appear in the data from spring onward.
• Medicare Advantage: The final rate notice in April will set the tone for 2027 contracting.
• Workforce: GME expansion is a long-cycle lever, not a near-term staffing fix.

Sources

• Marketplace 2026 Open Enrollment Period Report: National Snapshot (CMS)
• ACA Sign-Ups Are Down by Over a Million People (KFF)
• Nonprofit hospitals face credit headwinds as ACA subsidies expire: Fitch (Becker's)
• 2027 Medicare Advantage and Part D Advance Notice (CMS)
• Hospitals awarded new Medicare-funded residency slots (Becker's)