Which Affordable Care Act subsidies are ending in 2026 and why?
Executive summary
Enhanced Affordable Care Act premium subsidies enacted during the pandemic — the larger premium tax credits that expanded eligibility above 400% of the federal poverty level and lowered required household contributions — are scheduled to revert to pre‑pandemic rules on January 1, 2026 unless Congress acts, which would shrink subsidy amounts and eligibility [1] [2] [3]. Nonpartisan analyses predict big effects: the CBO projects 2.2 million people could lose coverage in 2026 if the enhanced credits expire [4], and KFF estimates average net premium payments for subsidized enrollees would more than double if enhanced credits lapse [5].
1. What exactly is scheduled to end: the “enhanced” premium tax credits
The provision set to lapse is the temporary enhancement to the ACA’s premium tax credit that was created by the American Rescue Plan and extended by later legislation; under current law those enhancements expire at the end of 2025 and the rules revert January 1, 2026 to the original ACA structure of subsidies [1] [2] [3]. The permanent statutory premium tax credit (the PTC) will remain, but without the ARPA/IRA enhancements the size of credit and who qualifies will change [1] [3].
2. How the math changes in plain terms: smaller credits and a return of the “subsidy cliff”
Under the enhanced rules, households at many incomes paid far less toward benchmark silver plans — in some cases 0% of income for low earners — and the 400% of FPL cap was effectively removed for many people; when the enhancements sunset, the percentage of income that households must pay for a benchmark plan rises at every income level and people above 400% FPL can again lose eligibility entirely, recreating the so‑called “subsidy cliff” [1] [6] [7].
3. Projected coverage and cost impacts if enhancements end
Analysts foresee steep effects: CBO told Congress that 2.2 million consumers would lose coverage in 2026 if enhanced subsidies are not extended [4]. KFF’s modeling shows average premium payments net of tax credits held at $888 in 2024–25 because of the enhancements, but would more than double for subsidized enrollees if those credits expire — a rise measured in the hundreds to thousands of dollars per household depending on income, age and state [5]. Other estimates cite large percentage increases (e.g., 75% average premium rise or a 114% jump in monthly payments for subsidized patients in some analyses), reflecting model differences and local variation [8] [9].
4. Why insurers are already raising rates for 2026
Insurers have proposed higher gross premiums for 2026 in part because the temporary subsidies made coverage more affordable and attracted different risk pools; without enhancements CBO and industry analyses expect adverse selection and higher gross premiums — insurers projected a median 18% increase in gross premiums for 2026 in one analysis — which compounds the effect of smaller subsidies and raises net costs for enrollees [2] [8].
5. Two competing narratives in the politics and budget trade‑offs
Supporters of letting the enhancements expire point to federal savings and argue the original ACA PTC was the law prior to temporary pandemic relief; opponents emphasize the coverage and affordability impacts, citing CBO and KFF estimates of lost coverage and higher premiums [3] [4] [5]. Congressional debate has centered on whether to extend the enhancements temporarily, make them permanent, or allow reversion to pre‑ARP rules — negotiations that have driven policy uncertainty and state‑level enrollment guidance [2] [10].
6. What the available reporting does not say
Available sources do not mention final congressional action after the dates of these analyses — for example, whether any legislative extension was passed covering 2026 — and do not provide a single, definitive dollar impact for every family because outcomes vary by income, age, and state (not found in current reporting). They also do not present a uniform projection for premium increases; different organizations model different magnitudes [5] [8] [9].
7. Practical consequences for consumers and states
State market exchanges and insurers are already signaling higher 2026 plan costs and some states estimate large per‑household increases if enhancements lapse (e.g., Connecticut’s estimate of thousands of dollars for some households), creating real time choices for enrollees and urging caution while enrollment decisions and congressional negotiations remain unresolved [10] [6].
Limitations: this summary relies solely on the provided reporting and government estimates; model assumptions (premium growth, plan selection, administration rules) differ across analyses and drive the range of projected impacts [5] [3].