Millions of Americans Face Higher Health Insurance Costs as ACA Subsidies Expire
The expiration of enhanced Affordable Care Act subsidies on January 1, 2026, leads to significant premium increases, affecting millions of Americans.
As of January 1, 2026, enhanced tax credits under the Affordable Care Act (ACA) have expired, resulting in substantial health insurance premium increases for millions of Americans. These subsidies, initially introduced during the COVID-19 pandemic and later extended, had significantly reduced costs for enrollees. Without them, premiums are projected to rise by an average of 114%, according to the Kaiser Family Foundation (KFF).
The Congressional Budget Office estimates that approximately 4 million individuals may lose coverage due to the increased costs. The expiration particularly impacts those who do not receive insurance through employers or qualify for Medicare or Medicaid, including self-employed workers and small business owners.
In December 2025, the U.S. Senate failed to pass legislation to extend these subsidies. Both Democratic and Republican proposals did not achieve the required votes, reflecting ongoing partisan divisions. A House vote on a potential extension is anticipated in early January, but its outcome remains uncertain.
The lapse in subsidies is expected to have broader economic implications. The Urban Institute projects a $32.1 billion reduction in healthcare provider revenue in 2026, including a $7.7 billion increase in uncompensated care. Additionally, the Commonwealth Fund estimates that 340,000 jobs could be lost in 2026, primarily in service-sector industries heavily dependent on employees with marketplace coverage.
As the new year begins, many Americans are confronting difficult choices regarding their health coverage, with some opting to forgo insurance due to unaffordable premiums. The situation underscores the ongoing challenges in ensuring affordable healthcare access nationwide.