Enhanced tax credits designed to reduce health insurance costs for Affordable Care Act (ACA) enrollees expired on January 1, 2026. This development has resulted in increased health insurance premiums for millions of Americans, with an average reported increase of 114% for subsidized enrollees. Legislative efforts to extend these subsidies prior to their expiration were unsuccessful, though a vote on a potential three-year extension is anticipated in the House of Representatives in January.
Impact on Enrollees
The expiration of these enhanced subsidies primarily affects individuals who do not receive health insurance through an employer and do not qualify for Medicaid or Medicare. This demographic includes self-employed individuals, small business owners, farmers, and ranchers. The change occurs during a midterm election year, where healthcare affordability is a key concern for voters.
According to an analysis by the health care research nonprofit KFF, over 20 million subsidized ACA enrollees are experiencing an average premium increase of 114% in 2026. This rise coincides with a general increase in U.S. health costs, contributing to higher out-of-pocket expenses for many plans.
Individual examples of premium increases include:
- A 49-year-old freelance filmmaker and adjunct professor in Salt Lake City reported his monthly premium increasing from approximately $350 to nearly $500.
- A 37-year-old social worker experienced an increase in her monthly premium from $85 to nearly $750.
Details of the Expired Subsidies
The enhanced subsidies were initially introduced in 2021 as a temporary measure during the COVID-19 pandemic. They were subsequently extended by the then-governing Democratic party, with the expiration date set for early 2026. Under these expanded subsidies:
- Some lower-income enrollees had no premiums.
- Payments for high earners were capped at 8.5% of their income.
- Eligibility criteria were expanded for middle-class individuals.
Legislative Efforts and Future Outlook
Throughout the past year, legislative discussions surrounding the subsidies took place. Democrats advocated for the extension of these subsidies, following reductions in federal health care and food assistance programs. While some Republican legislators acknowledged the issue, legislative action was delayed.
In December, the Senate rejected two distinct legislative proposals:
- A Democratic bill proposing a three-year extension of the subsidies.
- A Republican alternative focused on health savings accounts.
In the House of Representatives, a bipartisan group consisting of four centrist Republicans and Democrats initiated action to potentially force a vote in January on a three-year extension of the tax credits. However, the prospect of its passage remains uncertain, given the Senate's previous rejection of a similar plan.
Projected Enrollment Changes
Health analysts have issued projections regarding the impact on enrollment. Forecasts suggest that the expiration of subsidies could lead approximately 4.8 million Americans to discontinue their health insurance coverage in 2026, according to a September analysis by the Urban Institute and Commonwealth Fund. This analysis also projected that such a trend could result in a program population that is older and sicker, potentially increasing costs for remaining enrollees over time.
The total number of ACA enrollees is approximately 24 million. The open enrollment period for selecting and modifying plans is ongoing in most states until January 15, making the definitive impact on enrollment figures yet to be determined.