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Fact check: What are the projected premium increases after the ACA subsidies expire?
Executive Summary
If the enhanced Affordable Care Act (ACA) premium tax credits expire, multiple recent studies project large premium increases for subsidized Marketplace enrollees and sizable coverage losses, with the most striking estimate showing average net premiums rising from about $169 to $919 for those under 250% of the federal poverty level (FPL). Other analyses show smaller but still substantial premium growth—roughly a 75 percent increase for many subsidized households—or steady benchmark premium increases that predate any repeal of subsidies, illustrating diverging estimates and methods across the literature [1] [2] [3].
1. Why one headline number jumps off the page: a fourfold increase claim
A September 2025 study produces the most dramatic projection: net premiums for subsidized enrollees under 250% FPL would increase from $169 to $919 if enhanced premium tax credits lapse, implying a more than fourfold rise and driving nearly 4.8–5.0 million people to lose coverage in 2026 under that scenario [1]. This analysis frames the effect as concentrated among lower‑income Marketplace enrollees who currently pay very low net premiums because of temporarily expanded credits; the estimate combines current subsidy levels, enrollment patterns, and modeled insurer pricing responses to the loss of subsidies. The study’s method produces a stark affordability shock that policymakers and advocates cite as a major near‑term risk if enhanced credits are not extended [1].
2. A calmer estimate: three‑quarters higher premiums for many households
A June 2025 paper offers a more moderate but still substantial alternative: allowing the enhanced premium tax credits to lapse would raise net premiums roughly 75 percent for most subsidized households, which the authors say could undermine Marketplace functioning and increase uninsurance [2]. This estimate differs from the fourfold figure by applying different assumptions about insurer pricing, administrative churn, and behavioral responses by enrollees. The variation shows how sensitive outcomes are to modeling choices—particularly whether insurers fully pass subsidy changes into premiums, how many unsubsidized people exit risk pools, and whether federal or state policies mitigate price shocks [2].
3. The historical context: how much the ARPA/temporary enhancements mattered
Temporary enhancements under the American Rescue Plan Act materially lowered premiums and boosted enrollment: analysts report average annual premium reductions of about $800 and that around 91 percent of enrollees were receiving credits in early 2023, contributing to a 21 percent decline in average monthly premiums relative to 2021 and enabling many to find plans for $10 or less per month in 2024 [4]. Those historical figures explain why models that reverse the enhancements show large premium increases: the baseline with enhanced subsidies produces unusually low out‑of‑pocket premiums, so returning to pre‑enhancement policy widens the gap and affordability harms are magnified for lower‑income enrollees [4].
4. Market dynamics: benchmark premiums were already rising before the subsidy debate
Not all change is driven by subsidy policy: benchmark Marketplace premiums rose modestly from $473 in 2024 to $500 in 2025 (about 5.8 percent), an increase observers link to market and health‑care cost trends rather than subsidy mechanics alone [3]. This indicates that even with enhanced credits in place, insurers adjusted pricing, and underlying cost trends drive premium trajectories. Analysts caution that models predicting extreme increases if subsidies lapse must account for contemporaneous premium trends; otherwise they may overattribute future premium movements solely to subsidy changes [3].
5. Coverage impact estimates converge on millions losing coverage, but disagree on scale
Across studies, analysts uniformly predict substantial coverage losses if enhanced credits expire, but they disagree on magnitude and distribution. The September 2025 study forecasts nearly 4.8–5.0 million people losing coverage in 2026 tied to affordability shocks [1]. Other research emphasizes that a significant portion—but not all—of the ACA’s coverage gains depends on subsidies, with one working paper attributing about 55 percent of ACA coverage gains to Marketplace subsidies and 19 percent specifically to ARPA’s enhancements, underscoring the central role of credits even as precise loss estimates vary [5].
6. Why models disagree: assumptions, time frames, and policy context matter
Differences across projections reflect assumptions about insurer responses, enrollee behavior, and countervailing policies. Some analyses assume insurers will substantially raise gross premiums when subsidies disappear, others presume more muted pricing shifts or partial policy backstops. Time horizon matters too: short‑term mechanical calculations produce larger immediate premium jumps, whereas dynamic models that incorporate enrollment churn and insurer entry/exit show more moderate long‑run adjustments. The literature therefore presents a range—from a roughly 75 percent average rise to localized fourfold spikes for the lowest‑income enrollees—each grounded in transparent but divergent modeling choices [2] [1] [5].
7. Bottom line for policymakers and the public: high stakes, uncertain magnitude
The consensus across recent research is clear: expiration of enhanced premium tax credits would significantly worsen affordability and likely raise the uninsured rate, with most analyses pointing to millions affected; however, the exact premium percentage increase depends on modeling choices and evolving market conditions. Decision‑makers should therefore weigh both the large estimated downside risks in the most severe models and the more moderate—but still meaningful—estimates in others, while recognizing that real‑world outcomes will hinge on insurer reactions, state mitigation measures, and federal policy decisions in the months ahead [1] [2] [3].