Millions Face Health Insurance Premium Hikes as Subsidies Expire

Dec 26, 2025, 2:50 AM

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The expiration of enhanced premium tax credits (PTCs) at the end of this year is poised to significantly impact millions of Americans who rely on the Affordable Care Act (ACA) for health insurance. With over 24 million people enrolled in ACA plans, many are facing the prospect of double-digit premium increases alongside reduced federal subsidies, which have made health coverage more affordable since their introduction during the COVID-19 pandemic.

Health insurers are proposing a median rate increase of 18% for 2026, a sharp rise from the 7% increase seen in the previous year. This increase is attributed to rising medical costs, a sicker risk pool due to the expiration of enhanced subsidies, and other factors. If Congress does not act to extend these subsidies, many enrollees will experience a "double whammy" of losing their tax credits while also facing higher premiums.

The enhanced PTCs, which were first introduced in 2021 and extended through the Inflation Reduction Act in 2022, have allowed many low- and middle-income individuals to afford health insurance by significantly lowering their premium contributions. For instance, an individual earning $28,000 would see their annual premium payment rise from approximately $325 to $1,562 if the enhanced credits expire. This represents a staggering increase of over 75% in premium costs for many enrollees.

The potential consequences of these changes are dire. Analysts estimate that if the enhanced subsidies are not renewed, the average premium for subsidized enrollees could more than double, increasing from $888 in 2025 to $1,904 in 2026. This could lead to a significant drop in enrollment, with estimates suggesting that ACA enrollment could fall by as much as 57% due to the combination of expiring tax credits and new paperwork requirements.

The political landscape surrounding this issue is complex. With Congress currently deadlocked over government funding, the fate of the enhanced subsidies remains uncertain. Democrats are advocating for the extension of these subsidies as part of any funding deal, while Republicans have indicated they will only negotiate on the issue once the government is funded. This impasse leaves millions of Americans in limbo as the open enrollment period for ACA plans approaches on November 1.

The expiration of enhanced PTCs will disproportionately affect those with incomes above 400% of the federal poverty level, who will lose their eligibility for subsidies altogether. For example, a couple earning $85,000 could see their annual premium payments rise by over $22,600, making health insurance unaffordable for many. Conversely, lower-income individuals may also face increased costs, albeit to a lesser extent, as they will still qualify for some level of financial assistance.

The implications of these changes extend beyond individual finances. Health policy experts warn that a reduction in coverage could lead to increased emergency care needs, straining hospitals and potentially resulting in closures or higher costs for those who remain insured. As more individuals drop out of the insurance market, the risk pool will become sicker, leading to further premium increases for those who remain enrolled.

In summary, the expiration of enhanced premium tax credits at the end of this year poses a significant threat to the affordability of health insurance for millions of Americans. With rising premiums and reduced subsidies, many individuals may find themselves unable to afford necessary medical care, leading to broader public health implications. As Congress continues to debate the future of these subsidies, the urgency for action grows, with millions of lives hanging in the balance.

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