What will happen to monthly premium costs for ACA enrollees if enhanced tax credits expire after 2025?
Executive summary
If the enhanced Affordable Care Act (ACA) premium tax credits expire at the end of 2025, enrollees who now receive extra subsidies can expect substantial increases in their monthly premium payments — KFF estimates average net premium payments would rise by about 114% (roughly $1,016 annually) and insurers’ filings suggest gross premiums could climb a median ~18% for 2026, with part of that driven by subsidy expiration [1] [2]. Analyses from KFF, Bipartisan Policy Center, CBPP, Peterson-KFF and others project specific examples where some households would see annual premium increases ranging from hundreds to tens of thousands of dollars depending on age, income and state [3] [4] [5].
1. What the “enhanced” credits do — and what ends in 2026
Enhanced premium tax credits, first expanded in 2021 and extended through 2025, cap the share of income many enrollees must pay and made subsidies available at higher income levels; that extension is set to expire January 1, 2026 unless Congress acts, returning subsidy rules to pre‑enhancement formulas [6] [4]. The immediate legal effect is lower subsidy amounts or complete loss of credits for people above prior eligibility thresholds, which directly raises their out‑of‑pocket monthly premiums [6] [3].
2. How big the average premium shock could be
Multiple organizations model big average increases: KFF’s calculator and briefs project a roughly 114% average increase in what enrollees pay net of credits (an estimated $1,016 per year on average) if enhanced credits expire [1]. Insurers’ rate filings and trackers show proposed gross premium increases for 2026 with a median insurer filing of ~18% — and insurers explicitly attribute several percentage points of that to expected subsidy expiration [2] [7].
3. Who would be hit the hardest — varied impacts by age, income, and state
The burden is uneven. Older enrollees and those over the 400% federal poverty line who lose subsidies face the largest absolute increases: KFF and Bipartisan Policy Center examples show a 60‑year‑old couple at ~402% FPL could see yearly premiums rise by roughly $22,600, turning premiums from single‑digit shares of income into a quarter of income in some locations [5] [4]. Mapping analyses show in many states a 60‑year‑old just above 400% FPL could see premiums double or triple, with state‑by‑state differences driven by local premium levels [8].
4. Why insurers’ rates also rise even for subsidized plans
Two mechanisms push premiums up beyond just subsidy changes: (a) insurers price 2026 rates assuming the enhanced credits will not be renewed, which raises gross premiums; and (b) broader health‑care cost inflation (drugs, labor) is already driving proposals for larger increases. Rate filings in several states attribute 4–7 percentage points of proposed increases to the subsidy expiration, with the remainder tied to cost trends [7] [2].
5. Coverage and economic ripple effects beyond monthly premiums
Analysts warn that premium shocks could cause coverage losses and wider economic impacts: Urban Institute and related reporting project millions could lose ACA coverage or become uninsured, and briefs estimate higher uncompensated care and job impacts if many lose coverage; the Commonwealth Fund and other analysts quantify substantial potential increases in uninsured counts and downstream fiscal and system stress [9] [10]. The Congressional Budget Office and others have also modeled large coverage and federal cost effects tied to whether subsidies are extended [4] [9].
6. What policy and consumer responses are available
Congressional action to extend or modify the enhanced credits would blunt or eliminate the projected premium shock; in the absence of legislative change, enrollees can shop for lower‑cost plans during open enrollment, and insurers/states may adjust filings — but available sources emphasize that late fixes can cause administrative and communication problems for open enrollment and rate setting [11] [9] [12].
7. Limitations, disagreements, and what reporting doesn’t settle
Estimates differ in scale because models use different 2026 premium baselines, behavioral assumptions, and enrollment projections; for example, Urban Institute, CBO, KFF and Bipartisan Policy Center provide overlapping but not identical forecasts of coverage loss and dollar impacts [4] [1] [10]. Available sources do not mention precise month‑by‑month premium changes for every enrollee or final 2026 rates (those will vary by plan, age, ZIP code and whether Congress acts) — state filings give early signals but are not the complete national picture [7] [2].
8. Bottom line for enrollees now
If enhanced credits expire, expect substantially higher monthly premiums for many Marketplace enrollees — on average more than double in net payments per several analyses — with the biggest hits to older people, those just above subsidy cutoffs, and residents of high‑premium states; precise impacts will depend on age, income, state and whether Congress intervenes before coverage year 2026 [1] [8] [5].