More than 22 million Americans could soon face higher health insurance premiums as the Affordable Care Act’s enhanced subsidies are set to expire. The tax credits, which have kept insurance costs low for millions, are now at the center of a heated government standoff that has already shut down federal operations.
Experts warn that millions could lose coverage entirely or face significant premium hikes if Congress fails to act.
Who currently benefits from these ACA subsidies?
Nearly everyone who buys their health insurance through an Affordable Care Act (ACA) marketplace currently receives an enhanced premium tax credit. These enhanced subsidies, introduced in 2021 under the American Rescue Plan, have lowered costs dramatically for millions of Americans. The typical ACA enrollee is an adult in their mid-40s earning between 100 and 200 percent of the federal poverty line, roughly $21,000 to $42,000 for a family of two, as per a report by The Washington Post.
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Lower-income individuals will face the most severe impact if these enhanced credits disappear, as they’ll revert to pre-2021 subsidy levels. Many higher-income enrollees could also lose their subsidies entirely and be forced to cover the full cost of premiums out-of-pocket.
According to a KFF analysis, nearly half of all adults with ACA marketplace plans are self-employed, small-business owners, or employees of small businesses. These groups typically lack employer-sponsored health insurance and depend heavily on the ACA for affordable coverage, as per a report by The Washington Post.
Marketplace plans are also popular among specific professions. At least a quarter of chiropractors, musicians, real estate brokers, farmers, dentists, and manicurists rely on these tax credits. Meanwhile, around 9 percent of ACA marketplace users are retirees not yet eligible for Medicare, and 6 percent are students.
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Which states will feel the biggest impact?
While the enhanced tax credits benefit people across the nation, their reach is particularly significant in states that voted for Donald Trump in the 2024 presidential election. Roughly 80 percent of those who receive the credits live in these states, as per a report by The Washington Post.
Florida and Georgia have some of the highest shares of residents relying on these credits. In Florida, about 24 percent of residents under 65 benefit, while in Georgia the figure stands at 14 percent, as per a report by The Washington Post.
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The credits are especially important in the ten states that have not expanded Medicaid eligibility under the ACA. In those states, many low-income individuals without employer-based coverage rely solely on ACA marketplace plans. After the enhanced tax credits took effect in 2021, enrollment in ACA plans nearly doubled, particularly in these non-Medicaid expansion states, where coverage costs for many dropped to zero.
If the enhanced premium tax credits expire, nearly all ACA marketplace customers will see their costs rise sharply. KFF estimates that the average premium could more than double.
A couple in Dallas making $32,000 annually (about 150 percent of the federal poverty level) would see their monthly premiums jump from $0 to around $1,300. For those making 250 percent of the poverty level ($53,000 for a couple), the share of income spent on premiums would rise from 4 percent to 8 percent, as per a report by The Washington Post.
“The cost of health insurance is never going to be low enough for a person who makes just above poverty to be able to afford it,” said Cynthia Cox, vice president of the Program on the ACA at KFF. “If you want that person to have health insurance, then there needs to be financial assistance.”
Those earning more than 400 percent of the poverty level (around $84,000 for a two-person household) would be hit hardest. They currently spend about 8 percent of their income on premiums, but if the subsidies vanish, they’ll have to shoulder the entire cost, a painful blow, especially as health insurance premiums are expected to rise by 18 percent in 2026, as per a report by The Washington Post.
Even small administrative hurdles could cause major coverage losses. A Brookings Institution analysis warns that the requirement to manually pay premiums, even as low as $1, could lead to about 430,000 people losing insurance due to non-payment.
If Congress fails to extend the enhanced credits, the Urban Institute estimates that roughly one-third of those currently benefiting will lose their subsidies altogether. Of those, 4.8 million could become uninsured, while others may find alternative coverage through a spouse or by changing jobs.
“The marketplaces themselves are going to become smaller,” said Jessica Banthin, a senior fellow at the Urban Institute. “In some states, they’ll be half the size. And so the people who stay enrolled are going to have fewer choices.”
Those who remain in the marketplaces will face higher costs or may have to downgrade to plans with less coverage. Many enrollees may not even realize the subsidies are expiring. A recent poll found that over half of marketplace users had heard little or nothing about the issue, as per a report by The Washington Post.
According to Cox, this confusion is because “people are really just focused on how much do they have to pay each month,” said Cox. “They’re really not looking at how much they would have had to pay without the enhanced rate.”
Who will be most affected by the loss of ACA subsidies?
Low- and middle-income Americans, particularly those self-employed or working for small businesses, will face the steepest cost increases if the enhanced tax credits expire.
What happens if the enhanced premium tax credits expire?
About 4.8 million people could become uninsured, while others may have to switch plans, pay more, or seek coverage through an employer.
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Experts warn that millions could lose coverage entirely or face significant premium hikes if Congress fails to act.
Who currently benefits from these ACA subsidies?
Nearly everyone who buys their health insurance through an Affordable Care Act (ACA) marketplace currently receives an enhanced premium tax credit. These enhanced subsidies, introduced in 2021 under the American Rescue Plan, have lowered costs dramatically for millions of Americans. The typical ACA enrollee is an adult in their mid-40s earning between 100 and 200 percent of the federal poverty line, roughly $21,000 to $42,000 for a family of two, as per a report by The Washington Post.
ALSO READ: Who will inherit Diane Keaton’s massive $100 million fortune? Did she leave a will? Here’s what we know
Lower-income individuals will face the most severe impact if these enhanced credits disappear, as they’ll revert to pre-2021 subsidy levels. Many higher-income enrollees could also lose their subsidies entirely and be forced to cover the full cost of premiums out-of-pocket.
According to a KFF analysis, nearly half of all adults with ACA marketplace plans are self-employed, small-business owners, or employees of small businesses. These groups typically lack employer-sponsored health insurance and depend heavily on the ACA for affordable coverage, as per a report by The Washington Post.
Marketplace plans are also popular among specific professions. At least a quarter of chiropractors, musicians, real estate brokers, farmers, dentists, and manicurists rely on these tax credits. Meanwhile, around 9 percent of ACA marketplace users are retirees not yet eligible for Medicare, and 6 percent are students.
ALSO READ: How did D'Angelo die? Here's the cause of death of the Soul Legend
Which states will feel the biggest impact?
While the enhanced tax credits benefit people across the nation, their reach is particularly significant in states that voted for Donald Trump in the 2024 presidential election. Roughly 80 percent of those who receive the credits live in these states, as per a report by The Washington Post.
Florida and Georgia have some of the highest shares of residents relying on these credits. In Florida, about 24 percent of residents under 65 benefit, while in Georgia the figure stands at 14 percent, as per a report by The Washington Post.
ALSO READ: Chikungunya spreads across US - here are causes, symptoms, treatment, vaccines to keep you protected
The credits are especially important in the ten states that have not expanded Medicaid eligibility under the ACA. In those states, many low-income individuals without employer-based coverage rely solely on ACA marketplace plans. After the enhanced tax credits took effect in 2021, enrollment in ACA plans nearly doubled, particularly in these non-Medicaid expansion states, where coverage costs for many dropped to zero.
How much will premiums increase?
If the enhanced premium tax credits expire, nearly all ACA marketplace customers will see their costs rise sharply. KFF estimates that the average premium could more than double.
A couple in Dallas making $32,000 annually (about 150 percent of the federal poverty level) would see their monthly premiums jump from $0 to around $1,300. For those making 250 percent of the poverty level ($53,000 for a couple), the share of income spent on premiums would rise from 4 percent to 8 percent, as per a report by The Washington Post.
“The cost of health insurance is never going to be low enough for a person who makes just above poverty to be able to afford it,” said Cynthia Cox, vice president of the Program on the ACA at KFF. “If you want that person to have health insurance, then there needs to be financial assistance.”
Those earning more than 400 percent of the poverty level (around $84,000 for a two-person household) would be hit hardest. They currently spend about 8 percent of their income on premiums, but if the subsidies vanish, they’ll have to shoulder the entire cost, a painful blow, especially as health insurance premiums are expected to rise by 18 percent in 2026, as per a report by The Washington Post.
Even small administrative hurdles could cause major coverage losses. A Brookings Institution analysis warns that the requirement to manually pay premiums, even as low as $1, could lead to about 430,000 people losing insurance due to non-payment.
What could happen if Congress doesn’t act?
If Congress fails to extend the enhanced credits, the Urban Institute estimates that roughly one-third of those currently benefiting will lose their subsidies altogether. Of those, 4.8 million could become uninsured, while others may find alternative coverage through a spouse or by changing jobs.
“The marketplaces themselves are going to become smaller,” said Jessica Banthin, a senior fellow at the Urban Institute. “In some states, they’ll be half the size. And so the people who stay enrolled are going to have fewer choices.”
Those who remain in the marketplaces will face higher costs or may have to downgrade to plans with less coverage. Many enrollees may not even realize the subsidies are expiring. A recent poll found that over half of marketplace users had heard little or nothing about the issue, as per a report by The Washington Post.
According to Cox, this confusion is because “people are really just focused on how much do they have to pay each month,” said Cox. “They’re really not looking at how much they would have had to pay without the enhanced rate.”
FAQs
Who will be most affected by the loss of ACA subsidies?
Low- and middle-income Americans, particularly those self-employed or working for small businesses, will face the steepest cost increases if the enhanced tax credits expire.
What happens if the enhanced premium tax credits expire?
About 4.8 million people could become uninsured, while others may have to switch plans, pay more, or seek coverage through an employer.
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