Key Takeaways:
- Enhanced tax credits for Affordable Care Act (ACA) enrollees have expired, resulting in higher health costs for millions of Americans.
- The expired subsidies affected a diverse group of Americans, including self-employed workers, small business owners, and those who don’t qualify for Medicaid or Medicare.
- The average premium cost for ACA enrollees is expected to increase by 114% in 2026, with some individuals facing much steeper hikes.
- The expiration of subsidies may drive younger and healthier Americans to forgo health insurance coverage, potentially making the program more expensive for older and sicker individuals.
- Lawmakers are expected to vote on a potential solution in January, but success is far from guaranteed.
Introduction to the Issue
The expiration of enhanced tax credits for Affordable Care Act (ACA) enrollees has resulted in higher health costs for millions of Americans. The subsidies, which were first introduced in 2021 as a temporary measure to help Americans during the COVID-19 pandemic, were extended by Democrats in power at the time, but ultimately expired at the start of 2026. The change affects a diverse group of Americans who don’t get their health insurance from an employer and don’t qualify for Medicaid or Medicare, including self-employed workers, small business owners, farmers, and ranchers.
The Impact on Americans
The expiration of the subsidies has significant implications for Americans who rely on the ACA for health insurance. On average, the more than 20 million subsidized enrollees in the ACA program are seeing their premium costs rise by 114% in 2026, according to an analysis by the health care research nonprofit KFF. Some individuals, like Salt Lake City freelance filmmaker and adjunct professor Stan Clawson, are facing significant increases in their premium costs. Clawson’s monthly premium payment is jumping from just under $350 a month to nearly $500 a month, a strain for the 49-year-old who lives with paralysis from a spinal cord injury. Others, like single mom Katelin Provost, are dealing with even steeper hikes, with her monthly premium payment increasing from $85 a month to nearly $750.
The Potential Consequences
The expiration of the subsidies may drive many Americans, especially younger and healthier individuals, to forgo health insurance coverage altogether. This could have significant consequences for the ACA program, potentially making it more expensive for older and sicker individuals who remain enrolled. An analysis conducted by the Urban Institute and Commonwealth Fund projected that the higher premiums from expiring subsidies would prompt some 4.8 million Americans to drop coverage in 2026. While the final effect on enrollment is yet to be determined, many Americans are holding out hope that Congress will find a way to revive the subsidies early in the year.
The Political Response
The expiration of the subsidies has sparked a significant political response, with Democrats and moderate Republicans calling for a solution to address the issue. President Donald Trump floated a potential way out, but ultimately backed off after conservative backlash. The Senate rejected two partisan health care bills in December, including a Democratic pitch to extend the subsidies for three more years and a Republican alternative that would provide Americans with health savings accounts. In the House, four centrist Republicans broke with GOP leadership and joined forces with Democrats to force a vote on a three-year extension of the tax credits, which could come as soon as January.
The Need for Broader Reform
Many Americans whose premiums are skyrocketing say that lawmakers don’t understand what it’s really like to struggle to get by as health costs ratchet up with no relief. They are calling for the subsidies to be restored alongside broader reforms to make health care more affordable for all Americans. As 58-year-old ACA enrollee Chad Bruns noted, "Both Republicans and Democrats have been saying for years, oh, we need to fix it. Then do it. They need to get to the root cause, and no political party ever does that." The expiration of the subsidies has highlighted the need for a more comprehensive approach to addressing the affordability of health care in the United States.
Conclusion
The expiration of enhanced tax credits for ACA enrollees has resulted in higher health costs for millions of Americans, with significant implications for the affordability of health care in the United States. While lawmakers are expected to vote on a potential solution in January, success is far from guaranteed. As the debate over the subsidies continues, it is clear that a more comprehensive approach to addressing the affordability of health care is needed, one that takes into account the diverse needs and experiences of Americans who rely on the ACA for health insurance.