Open enrollment for 2026 coverage is underway and is running through January 15, 2026, against a backdrop of unprecedented premium increases and policy uncertainty. Last year’s enrollment reached a record 24.3 million Americans in ACA marketplace coverage (CMS), more than double the 2020 enrollment. This year’s enrollment season brings stark financial challenges: ACA marketplace premiums are rising 26% on average for 2026, the largest increase since 2018, with Healthcare.gov-specific rates reportedly up 30% and some markets exceeding 50%. Meanwhile, Medicaid policy changes threaten to eliminate over $1 trillion in funding during the next decade.
For both payers and providers, these pressures are prompting a reassessment of how work is done. Many are turning to AI and automation, including agentic automation that can manage complex, multi-step processes without human input, as a path to financial resilience.
Converging financial pressures
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For healthcare organizations that rely heavily on commercial and exchange populations, these shifts directly affect revenue cycle performance, patient access, and collections.
Health System Tracker analysis of insurer rate filings shows median medical cost trends near 8%, driven by hospital contract rate growth and the cost of specialty pharmaceuticals, including GLP-1 weight-loss drugs. PwC’s 2026 medical cost trend analysis projects trends of 8.5% for the group market and 7.5% for the individual market. Multiple insurers cite rising prices, increased utilization, and workforce-driven labor costs as dominant factors.
The enhanced subsidy uncertainty
The fate of enhanced ACA premium tax credits, which currently help 22 million Americans (92% of marketplace participants) remains the single largest variable affecting affordability. These subsidies expire December 31, 2025, in the middle of open enrollment. If Congress does not act, KFF projects subsidized consumers would see premiums more than double (rising 114%, from $888 to $1,904 annually), and as many as 4.8 million people could lose coverage. For health systems, that means more uninsured patients, lower collections, and higher charity-care burdens. Urban Institute analysis demonstrates a 60-year-old couple earning $85,000, just above the subsidy threshold, could face an additional $24,500 per year in premiums without enhanced subsidies, effectively pricing many middle-income families out of coverage.
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Medicaid funding cuts deepen the risk
Proposed Medicaid funding reductions would remove over $1 trillion in federal support during the next ten years, 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 Medicaid revenue loss, while Families USA analysis indicates dozens more could fall into negative operating margins.
Beyond direct revenue loss, administrative complexity is rising sharply as states apply different Medicaid eligibility and work requirements. This increases compliance costs for multi-state payers and delivery systems, while patients churn between Medicaid, commercial plans, and uninsured status.
Healthcare professionals respond: The impact of AI and automation
In the face of these pressures, healthcare organizations are reimagining operations with AI and automation, including agentic automation that can reason, act, and adapt across processes. What began as limited pilots is now expanding into enterprise-scale programs with measurable results.
McKinsey research found AI-enabled prior authorization can automate 50% to 75% of manual tasks. Further industry reporting and case studies confirm organizations deploying automation and AI for prior authorization, billing, and patient engagement are achieving 40% to 50% improvements in processing efficiency and annual revenue recovery 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%, saving tens of thousands of administrative hours and over eight hundred thousand dollars annually. Similar use has automated risk reporting for provider networks, saving thousands of clinical hours and eliminating manual reporting. Prominent health systems report that 35% to 45% of prior authorizations are now processed touchlessly, 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 is extending these benefits further by autonomously handling multi-step workflows, integrating systems, and adapting to exceptions without manual oversight.
Five priorities for providers and health systems
1. Analyze cost-shift exposure: Review payer contracts and model uncompensated-care impacts from subsidy expiration or Medicaid changes.
2. Automate high-friction workflows: Focus on prior authorization, denial management, and billing to accelerate cycle times and improve cash flow. Systematic automation presents a substantial opportunity for revenue recovery and administrative efficiency.
3. Link clinical and administrative data: Implement predictive analytics to identify high-risk members earlier and guide proactive care management.
4. Strengthen patient engagement: Collaborate with payers to provide navigation and financial-health tools to reduce bad debt. AI-enabled chatbots and support can boost coverage renewal and care engagement.
5. Manage transformation deliberately: Redesign workflows, redefine staff roles, and measure progress using clear metrics such as administrative cost per claim, denial rates, and staff hours saved.
Five priorities for payers
For payers, the margin pressures are just as severe as they are for providers. Rising medical costs, regulatory complexity, and higher member expectations are challenging the traditional administrative model. To remain competitive and financially sustainable, payers should focus on five priorities:
1. Use analytics and AI to identify high-acuity members earlier.
Leverage integrated clinical and claims data to predict risk, improve outreach timing, and reduce avoidable admissions.
2. Deploy agentic automation across core operations. Automate high-volume workflows such as claims processing, medical management, credentialing, and fraud detection to reduce administrative costs and error rates.
3. Enhance collaboration with providers.Partner on shared data models and value-based contracts that align incentives around outcomes, not transactions.
4. Invest in digital member engagement.Help members navigate complex benefit structures, cost-sharing, and prior-authorization processes through digital assistants and self-service AI tools.
5. Redesign operations for scalability. Move beyond legacy systems and siloed departments. Build agile operating models that integrate Automation and AI into end-to-end processes to support growth without proportional cost increases.
The bottom line
Open enrollment 2026 marks a turning point in U.S. healthcare. The cost pressures are no longer cyclical; they are structural. Organizations treating AI and automation, including agentic automation, as strategic levers rather than quick fixes will define the next decade of sustainable healthcare. For payers and providers alike, the challenge is clear: modernize operations, not just manage costs. Those that act now will emerge stronger, more efficient, and better equipped to keep care accessible, proving that innovation will shape the next era of care.
Photo: fstop123, Getty Images
Amit Bhagat, Chief Automation and AI Officer at Naviant, is a recognized industry thought leader, speaker, and management consultant passionate about applying advanced data analytics, intelligent automation, and digital health to solve healthcare’s most pressing and persistent challenges. Amit’s expertise lies at the intersection of technology, healthcare operations, and business transformations to create new operating models and develop innovative ways to improve profitability and growth.
Amit has twenty-plus years of experience helping clients succeed by developing information management, governance, business intelligence, advanced analytics, organizational design, intelligent automation, and performance management strategies and solutions. In an era of increasing change and labor challenges, Amit has worked extensively with clients in healthcare organizations to develop and implement growth strategies as well as drive measurable improvement in their operational performance by combining complex and information-based technology solutions, culture, people, and processes, all working in concert.
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