Open enrollment: why rising premiums are forcing healthcare organizations to focus on AI and automation

Open enrollment for 2026 coverage is underway and will continue until January 15, 2026, amid unprecedented premium increases and political uncertainty. Last year, enrollment reached a record 24.3 million Americans in ACA Marketplace (CMS) coverage, more than double 2020’s enrollment. This year’s enrollment season brings serious financial challenges: ACA Marketplace premiums are increasing 26% on average for 2026, the largest increase since 2018, Healthcare.gov-specific rates reportedly increased by 30%, and some markets exceed 50%. Meanwhile, Medicaid policy changes threaten to eliminate more than $1 trillion in funding over the next decade.

For both payers and providers, these pressures are prompting a reevaluation of how work is done. Many are looking to AI and automation, including agentic automation capable of managing complex, multi-step processes without human intervention, as a path to financial resilience.

Converging financial pressures

For healthcare organizations that rely heavily on commercial and exchange populations, these changes directly affect revenue cycle performance, patient access and collections.

Health System Tracker’s analysis of insurer rate requests shows median medical cost trends near 8 percent, driven by growth in hospital contract rates and the cost of specialty pharmaceuticals, including GLP-1 weight-loss drugs. PwC’s medical cost trend analysis for 2026 forecasts trends of 8.5% for the group market and 7.5% for the individual market. Several insurers cite rising prices, increased utilization and labor costs as dominant factors.

Increased subsidy uncertainty

The fate of the ACA enhanced premium tax credits, which currently help 22 million Americans (92% of market participants), remains the largest variable affecting affordability. These grants expire on December 31, 2025, during the open enrollment period. If Congress fails to act, KFF projects that subsidized consumers will see their premiums more than double (up 114 percent, from $888 to $1,904 per year), and as many as 4.8 million people could lose coverage. For health systems, that means more uninsured patients, fewer collections and a heavier charitable workload. The Urban Institute’s analysis shows that a 60-year-old couple earning $85,000, just above the subsidy threshold, could have to pay $24,500 more per year in premiums without enhanced subsidies, leaving many middle-income families without coverage.

Medicaid funding cuts worsen risk

Proposed cuts to Medicaid funding would eliminate more than $1 trillion in federal support over the next decade, with serious consequences for hospitals already operating on thin margins. The American Hospital Association warns that rural hospitals could lose $50.4 billion in federal Medicaid spending over ten years, leaving 1.8 million residents in rural communities without Medicaid coverage by 2034. JAMA Health Forum research projects that more than 100 rural hospitals are already at high risk of closure due to lost Medicaid revenue, while Families USA analysis indicates that dozens more could fall into negative operating margins.

Beyond the direct loss of income, administrative complexity increases sharply as states implement different Medicaid eligibility and work requirements. This increases compliance costs for payers and multistate delivery systems as patients oscillate between Medicaid, commercial plans, and uninsured status.

Healthcare Professionals Respond: The Impact of AI and Automation

Faced with these pressures, healthcare organizations are reinventing their operations with AI and automation, including agentic automation that can reason, act, and adapt across processes. What started as limited pilot projects are now expanding to company-wide programs with measurable results.

A McKinsey study found that AI-based prior authorization can automate 50-75% of manual tasks. Other industry reports and case studies confirm that organizations that deploy automation and AI for prior authorizations, billing, and patient engagement achieve 40-50% improvements in processing efficiency and annual revenue recovery of between $500,000 and $2 million.

In practice, automation can streamline the retrieval and validation of clinical records for prior authorization, reducing manual workload by 25 percent, saving tens of thousands of administrative hours and more than eight hundred thousand dollars annually. Similar use has helped automate risk reporting for provider networks, saving thousands of clinical hours and eliminating manual reporting. Leading health systems report that 35% to 45% of prior authorizations are now processed contactless, requiring no human intervention.

These examples demonstrate how AI and automation help stabilize staffing, reduce administrative friction, and improve patient access. The latest generation of agentic automation further extends these benefits by autonomously managing multi-step workflows, integrating systems, and adapting to exceptions without manual oversight.

Five priorities for providers and health systems

Five priorities for payers

For payers, margin pressures are just as severe as for providers. Rising medical costs, regulatory complexity and higher member expectations are challenging the traditional administrative model. To remain competitive and financially viable, payers must focus on five priorities:

The essentials

Open enrollment 2026 marks a turning point in U.S. health care. Cost pressures are no longer cyclical; they are structural. Organizations treating AI and automation, including agentic automation, as strategic levers rather than silver bullets will define the next decade of sustainable healthcare. For payers and providers alike, the challenge is clear: modernize operations, not just manage costs. Those who act now will emerge stronger, more effective and better equipped to maintain accessible care, proving that innovation will shape the next era of care.

Photo: fstop123, Getty Images

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