Expiration of Enhanced ACA Subsidies May Lead to Significant Premium Increases in 2026

Millions of Americans enrolled in Affordable Care Act (ACA) health plans may face significant premium increases starting January 1, 2026, as enhanced subsidies are scheduled to expire at the end of 2025. These subsidies, introduced under the American Rescue Plan Act in 2021 and extended through 2025 by the Inflation Reduction Act, have made ACA plans more affordable for many middle-class families.

Without congressional action to extend these subsidies, the Congressional Budget Office projects that nearly 4 million people could become uninsured in 2026 due to unaffordable premiums. This number is expected to rise to almost 7 million by 2034.

The expiration of enhanced subsidies would also lead to substantial premium increases across all income groups. For instance, individuals earning between 150% and 200% of the federal poverty level could see their annual premiums rise by approximately $725. Those earning above 400% of the federal poverty level, who were previously ineligible for subsidies, would face even steeper increases, with average annual premiums potentially rising by $2,914.

The potential loss of these subsidies has raised concerns among healthcare professionals. Dr. David Zonies, medical director at the University of Washington's Harborview Medical Center, expressed apprehension about the impact on patient care, stating that the loss of tax credits could lead to a return to pre-ACA conditions, which would be devastating.

Congress has yet to decide on extending the enhanced subsidies. Senate Majority Leader John Thune indicated that some members are paying attention to the issue, though he attributed the current situation to previous policy decisions. House Speaker Mike Johnson has been noncommittal but has kept the possibility of a funding extension open.

The uncertainty surrounding the future of these subsidies has left many families, like that of Leighanne Safford, in a difficult position. Safford and her husband currently pay $278 a month for health insurance, but their premium could increase to as much as $1,800 if the subsidies expire. To manage potential costs, they are considering switching to a high-deductible plan, which would lower monthly premiums but increase out-of-pocket expenses.

Open enrollment for 2026 ACA plans begins on November 1, 2025. Without an extension of the enhanced subsidies, many enrollees may face difficult choices regarding their health coverage in the coming year.