Prstart Hikes Hit ACA Health Insurance Plans as Subsidies Expire
Expiration of Enhanced Tax Credits Affects Millions
As the clock struck midnight on January 1, 2026, enhanced tax credits designed to alleviate the cost of health insurance for a significant majority of Affordable Care Act (ACA) enrollees expired. This development is likely to result in increased health care costs for millions of Americans, marking a challenging start to the new year. The expiration follows a contentious 43-day government shutdown, mainly focused on the subsidy issue, with moderate Republicans seeking a solution to salvage their political prospects for 2026. Despite discussions, including proposals from former President Trump, efforts to extend the subsidies were ultimately unsuccessful before the expiration date.
The change primarily impacts individuals and families who do not receive health insurance through an employer and do not qualify for Medicaid or Medicare. This demographic includes self-employed workers, small business owners, farmers, and ranchers who are now facing higher premiums.
Rising Health Care Costs Worry Enrollees
The expired subsidies were initially introduced in 2021 as temporary relief during the COVID-19 pandemic and were extended until the beginning of 2026. Under these subsidies, lower-income enrollees had access to health care with no premiums, while higher earners were capped at spending no more than 8.5% of their income on premiums. However, the expiration of these subsidies means that, on average, more than 20 million subsidized enrollees will see their health insurance premium costs increase by 114% in 2026, according to the Kaiser Family Foundation (KFF).
In Salt Lake City, 49-year-old Stan Clawson, a freelance filmmaker and adjunct professor, shared that his health insurance premiums would rise from just under $350 a month last year to nearly $500 this year. “It’s a strain for me, but I need health insurance due to my spinal cord injury,” he said. Conversely, single mother Katelin Provost is confronting an even steeper increase, with her monthly premium expected to jump from $85 to nearly $750.
“I really feel the middle class is being suffocated with rising costs,” Provost lamented, expressing disappointment over the lack of legislative action to address the issue.
Predictions of Coverage Drop-off
Health analysts have warned that the expiry of the subsidies might compel many ACA enrollees-particularly younger and healthier individuals-to forgo health insurance altogether. This trend could further strain the ACA by leaving a higher proportion of older and sicker individuals enrolled. An analysis from the Urban Institute and Commonwealth Fund has estimated that approximately 4.8 million Americans may drop their coverage in 2026 due to increased premiums.
Florida faces significant challenges, as it houses the largest number of ACA enrollees, with over 4.7 million affected. Texas, California, Georgia, and North Carolina follow closely behind in terms of enrollment figures.
Kylie Barrios, a Florida resident, expressed concern about her imminent loss of coverage, noting her premiums would effectively triple from $900 in 2025 to $2,500 in 2026.
Legislative Stalemate and Future Prospects
As enrollees brace for these rising costs, discussions regarding potential resolutions continue. The House of Representatives is expected to hold a vote in January that may present another chance to extend the subsidies. However, following the Senate’s rejection of two partisan bills in December-start aimed at extending the subsidies and start proposing health savings accounts-the outlook remains uncertain.
Many Americans affected by the premium hikes are vocal about their frustrations, urging lawmakers from both parties to address the underlying issues contributing to rising health care costs. “Both Republicans and Democrats have been talking about fixes for years. It’s time for action,” stressed Chad Bruns, a 58-year-old ACA enrollee from Wisconsin.
As the late enrollment window remains open until January 15 in most states, the final impact of this subsidy expiration on ACA enrollment is yet to be determined. Many enrollees, like Provost, are left hoping for legislative intervention to reinstate the subsidies and provide broader reforms to improve health care affordability.