Enhanced ACA health subsidies have officially ended. What happens now?
Millions of people are set to see dramatically increased health insurance costs as enhanced premium tax subsidies for Affordable Care Act policies expired at midnight Wednesday. The fight over these subsidies led to the month-long government shutdown in October.
The Affordable Care Act, passed in 2010, put into place federal subsidies that lowered insurance premiums for low-income Americans. These subsidies were then expanded to all Americans, regardless of their income, in the COVID-era American Rescue Plan Act. The legislation also eliminated health insurance premiums for some of the lowest-income households. Those considered to be high earners didn’t pay more than 8.5% of their income with the expanded subsidies, and more middle-class earners were eligible for them as well.
But the enhanced subsidies expired at the end of 2025. Citing massive costs, Republicans in Congress defeated proposals to extend them into 2026 or beyond.
So what does the ending of these enhanced credits mean for the average American?
Rising insurance prices
On average, the amount insurers will charge for coverage on ACA marketplaces will rise by 26% this year, according to the nonprofit health policy organization KFF. Increases will be less in the 19 states that have their own ACA marketplaces — an average of 17%. Elsewhere, premiums are expected to rise by an average of about 30%.
Without the enhanced credits, however, most enrollees will see monthly premium payments increase by about 114% on average — from $888 in 2025 to $1,904 in 2026.
About 22 million out of 24 million marketplace enrollees had been receiving the subsidies.
While some enrolled in the marketplace can still get a smaller tax credit, others won’t qualify at all — meaning they will lose their tax credit and still need to pay rising premiums.
Who relied most on the ACA subsidies?
Many people get their health insurance through their employer, but those who don’t go through the individual market. More than 90% of individual market health insurance enrollees have coverage through ACA marketplaces, KFF found. An average of 8% of adults under 65 working more than 20 hours per week in 2023 were covered by the individual market.
KFF estimates that nearly half of adult individual market insurance enrollees are small business owners and employees or are self-employed. Large numbers of chiropractors (34%); musicians and singers (30%); real estate brokers and sales agents (28%); farmers, ranchers and other agricultural managers (27%); dentists (26%); and manicurists and pedicurists (25%) are enrolled in individual market insurance, too.
Researchers at the University of Maryland’s School of Public Health said those who will feel the effects of the expired subsidies are people who already struggle to find quality health care they can afford.
“People living in states that didn’t expand Medicaid, small business owners and their employees, older adults and rural Americans are among those who will see the greatest impact from subsidies expiring,” Francesca G. Weaks, faculty researcher and health equity fellow for the Center for Health Equity at the University of Maryland, said.
People living in “high-cost areas,” where health insurance costs are higher, will also see the impacts, Mika Hamer, an assistant professor in health policy and management for the University of Maryland, said.
Hamer says young, healthy people who perceive themselves to be “lowest-risk” will exit the market as prices rise and “the cost of insurance might not seem worth it.” The Congressional Budget Office has estimated that almost 4 million people will be uninsured because of the expiration of the enhanced tax subsidies.
Rural hospitals are also at risk of closing in the face of “rising health care costs, inflation and low reimbursement rates,” Weaks said.
“This will definitely exacerbate existing challenges for low-income and rural communities who often must travel longer distances to seek out medical attention,” she added.
An analysis by The Commonwealth Fund shows patient revenues are estimated to decline by $1.6 billion at more than 1,700 hospitals without the subsidies.
What happens now?
Congress will have a chance to reinstate the enhanced tax credits later this month.
The House will vote on a proposal to extend the credits for three years, through 2028. Four Republican lawmakers sided with Democrats and signed a discharge petition to force a vote on the matter.
Still, the Senate already rejected a similar Democratic bill with a three-year extension, as well as a Republican plan to give Americans health savings accounts.
House Speaker Mike Johnson, R-La., called health care “a very complicated issue,” Roll Call reported. Johnson said there is “much more to come … to bring down the cost of health care” in early 2026.
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Ella Rae Greene, Editor In Chief
