How would expanded ACA premium subsidies under Biden affect premiums for a 45-year-old earning $40,000?
Executive summary
If the enhanced ACA premium tax credits enacted under the Biden administration are extended, a 45‑year‑old earning $40,000 would likely pay far less in 2025 than they would under pre‑enhancement rules — KFF and related analysts show enhanced credits dramatically reduced average premiums and expanded eligibility through 2025 [1]. If those enhancements expire at end of 2025, marketplace premiums for many enrollees would rise sharply in 2026 — KFF projects average annual premiums for subsidy recipients would jump from $888 in 2025 to $1,904 in 2026 without the enhanced credits [2].
1. How the Biden expansions changed what someone earning $40,000 pays
The American Rescue Plan Act and later extensions through the Inflation Reduction Act made subsidies larger and expanded eligibility through 2025, reducing the maximum share of income households must pay and in many cases cutting premiums to $0 for low‑ and moderate‑income people [3] [4]. KFF’s analysis shows the enhanced credits have meaningfully lowered out‑of‑pocket premiums for millions of marketplace enrollees, and the Bipartisan Policy Center and Commonwealth Fund report that the changes reduced required household contributions at many income levels through 2025 [4] [5].
2. What $40,000 in income means under the rules cited in reporting
Federal Poverty Level (FPL) figures used in recent reporting show one‑person FPL for 2025 at $15,650 and the expanded subsidies eliminated the old 400% FPL cutoff — making many households above that threshold eligible for assistance through 2025 [6] [4]. Available sources do not give a single dollar premium for a 45‑year‑old at $40,000 specifically, but they document that middle‑income households like someone earning $40,000 have seen substantially lower premiums thanks to the enhanced tax credits [1] [4].
3. How big the difference could be if enhancements expire
KFF and CNBC reporting estimate steep premium increases if enhancements lapse: KFF finds average annual premiums for subsidy recipients would rise from $888 to $1,904 without the enhanced credits — a 114% increase cited by CNBC — and analysts warn many enrollees would face “steep increases” in premium payments in 2026 absent congressional action [2] [1]. FactCheck.org and the Bipartisan Policy Center give concrete examples for families at various incomes to illustrate the magnitude of hikes under pre‑enhancement rules [5] [4].
4. Budget tradeoffs and competing claims about who benefits
CBO and JCT analyses cited by critics warn that making the enhanced subsidies permanent would carry large federal costs — CBO/JCT estimate a multi‑year net cost that critics call “debt‑driving” — while proponents point to coverage and affordability gains [7] [1]. Nonprofit and conservative groups argue the subsidies funnel large sums to insurers, encourage people out of employer coverage, and are costly to taxpayers [8] [9]. Independent analyses like KFF and Bipartisan Policy Center emphasize the enrollment and affordability impacts and note the Congressional Budget Office projects a $335 billion net cost over 2025–2034 for permanence [1] [4].
5. The political and timing context that matters for a 45‑year‑old
Enhanced credits were extended through 2025 by law; absent new legislation, they sunset at the end of 2025, meaning marketplace rates and individual premiums for 2026 would be priced under the pre‑enhancement formula [3] [1]. Political maneuvers in late 2025 and early December 2025 (including Senate Democratic efforts described by Politico) make the outlook uncertain — Congress could extend subsidies, but current reporting shows proposals face partisan obstacles [10].
6. What we can and cannot say from available reporting
Available sources document large average premium differences with and without the enhanced credits and provide example impacts for certain incomes and family sizes; they do not publish a single definitive premium figure for a 45‑year‑old at $40,000 under every possible plan or geography, so precise monthly dollar estimates for an individual depend on age curve, location, plan metal level and insurer pricing not provided here [1] [5]. For a concrete price for one person you must input age, ZIP code and plan choice into HealthCare.gov or state exchange tools; current reporting gives the directional effect — substantially lower premiums with the enhancements and substantially higher premiums if they expire [2] [1].
Bottom line: under the expanded Biden‑era credits a 45‑year‑old earning $40,000 would almost certainly pay much less than under pre‑2021 rules; if the enhanced credits lapse after 2025, that same person faces materially higher premiums in 2026 unless Congress acts [1] [2].