- Enhanced ACA marketplace premium tax credits expire after Dec. 31, 2025 unless Congress extends them, reinstating the 400% FPL subsidy cap and higher required premium contributions.
- Subsidized enrollees’ average net premiums are projected to jump about 114% from roughly $888 in 2025 to about $1,904 in 2026.
- Older adults (50–64) and households just over 400% of FPL are hit hardest, with many losing subsidies entirely and facing unaffordable premiums.
- Non-Medicaid expansion states face outsized premium spikes and coverage losses, with marketplace enrollment projected to fall from ~22.8M in 2025 to ~18.9M in 2026 if no policy change.
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Under current law, enhanced premium tax credits (PTCs) expire as of December 31, 2025, returning marketplace subsidy rules to their pre-IRA state. Key changes include restoring the income cap at 400 % of the federal poverty level (FPL) for eligibility and raising the maximum share of income households must pay towards a benchmark “silver” plan premiums. These structural changes, combined with rising insurer-filed base premium rates, create a dual cost shock for beneficiaries come 2026.
Quantitatively, the implications are large. with ~22 million ACA marketplace enrollees previously receiving these enhanced subsidies, the average net premium cost among subsidized enrollees is set to rise from ~$888 in 2025 to ~$1,904 in 2026—i.e. a jump of ~114% nationally. In certain states using HealthCare.gov, enrollees will see even steeper percentage increases due to both high base premiums and loss of nearly full subsidy.
Particularly vulnerable populations include:
- Older adults (50–64), many of whom will lose eligibility entirely and thus pay full premiums; premium increases for this group could average 75–90 %.
- Middle-income households (~400 % FPL) that had benefitted from subsidy-eligibility beyond previous income caps; many will suddenly face paying full premium costs.
- Enrollees in non-Medicaid expansion states and in states with high insurer cost bases, where market premiums are already elevated.
- Low-income households near poverty thresholds: even “zero-premium” plans may vanish and transition to multi-percent income contributions.
Strategic implications, for both policymakers and stakeholders, include:
- Insurer risk management: Insurers will need to file 2026 rates assuming subsidy expiration, but uncertainties may lead to over- or under-pricing; mortality of healthier enrollees and adverse selection could further raise costs.
- State policy responses: States with own-marketplaces or state subsidies may mitigate effects, but few are positioned to fully replace federal funding.
- Political fallout: Given widespread public awareness of premium hikes, congressional inaction threatens electoral backlash, particularly in competitive districts and states with high enrollment.
- Coverage losses: CBO and others estimate marketplace enrollment will drop from ~22.8 million in 2025 to ~18.9 million in 2026, with further declines to ~15.4 million by 2030 if subsidies remain expired.
Open questions remain that materially affect outcomes:
- Whether Congress will pass a retroactive or future extension—either clean or with restrictions—before or after January 2026 sessions are fully underway.
- The degree to which state subsidies or premium‐cost regulatory intervention can soften impact.
- The behavioral response of enrollees: how many will drop coverage, downgrade plans, or shift to non-marketplace insurance.
- The effect on overall health system costs—e.g. increased emergency care, delayed treatment—especially in older adults and rural communities.
Supporting Notes
- Enhanced premium tax credits will expire at the end of 2025 unless Congress acts, restoring earlier subsidy eligibility rules.
- About 22 million Americans receive enhanced subsidies through ACA marketplaces.
- Premium payments for subsidized enrollees will increase by ~114 % on average—rising from ~$888 in 2025 to ~$1,904 in 2026—if enhanced subsidies are not extended.
- Older adults (50–64) will see especially large cost increases and many will lose subsidy eligibility altogether; projected increases of 75–90 % on average.
- States that did not expand Medicaid will be disproportionately affected both in terms of enrollment loss and premium spikes.
- Projected drop in marketplace enrollment from ~22.8 million in 2025 to ~18.9 million in 2026, continuing down to ~15.4 million by 2030 if no policy change.
- Low‐income households near poverty line could lose zero-premium plans, now paying up to 4 % or more of income for benchmark plans.