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How much will premiums rise if ACA premium subsidies expire in 2025?
Executive Summary
If enhanced ACA premium tax credits expire at the end of 2025, multiple independent analyses converge on one clear finding: subsidized enrollees would face large premium cost shocks in 2026, with average out-of-pocket premium payments more than doubling in many studies and millions more Americans likely to become uninsured. Estimates vary on magnitude and timing — from insurers’ proposed premium rate increases to federal budget models projecting long-term coverage losses — but the consistent headline is a sharp affordability disruption concentrated on lower‑income, older, and middle‑class households [1] [2] [3] [4].
1. Who would be hit hardest? The distributional sting is predictable and stark
Analyses show that lower‑income people who currently pay little or no premium would see the biggest percentage increases, while older and middle‑income enrollees would face large absolute dollar increases. KFF’s modeling projects average per‑enrollee premium payments rising from $888 in 2025 to $1,904 in 2026 — a 114% jump that translates to about $1,016 in additional annual premium burden for the average subsidized enrollee [1] [5]. The Congressional Budget Office–informed reporting indicates that 4 million more people could be uninsured by 2034, reflecting both immediate price shocks and longer‑run coverage erosion [6]. The Center on Budget and Policy Priorities scenario frames concrete household examples: a single person at $22,000 shifting from $0 to $66 monthly, and a family of four at $66,000 facing a $252 monthly increase, or roughly $3,025 annually — demonstrating how the policy change affects incomes differently [3].
2. How big are insurers’ proposed rate changes versus net consumer costs? Don’t confuse the two
Insurer filings and marketplace rate requests show median premium increases near 18–20% for 2026 absent subsidies, compared with around 7% expected for 2025, reflecting insurers’ pricing expectations [4]. But policymakers and researchers emphasize a different metric: the change in enrollees’ out‑of‑pocket premium payments after loss of subsidies. That metric can be far larger than insurers’ sticker price changes because subsidies currently cover a large share of premiums; researchers estimate average out‑of‑pocket premiums could rise roughly 75% to more than 100% depending on the study, with many households seeing costs double or triple [4] [2] [5]. This distinction explains why headlines citing insurer rate notices (single‑digit percentage increases) can coexist with analyses projecting doubled consumer bills.
3. How many people could lose coverage? Short‑term shock versus long‑term scarring
Projections vary but point to sizeable coverage losses. KFF’s work estimates roughly 4.8 million people could become uninsured, raising the uninsured rate by about 21 percent, while the Congressional Budget Office–oriented reporting estimates about 4 million additional uninsured by 2034, indicating both a near‑term spike and persistent effects over years [7] [6]. Analysts note that the number uninsured depends on behavioral responses — whether people drop coverage entirely, switch to narrower or higher‑cost plans, or rely on other sources like employer coverage or Medicaid — and on geographic and demographic variation in subsidy reliance and plan availability [8]. The consensus is not a single count but a clear signal: millions would be at higher risk of losing coverage.
4. What are the main uncertainties and competing narratives? Timing, modeling choices, and policy context matter
Differences across analyses stem from modeling assumptions about insurer pricing, consumer behavior, and alternative coverage pathways. Some estimates emphasize insurer rate filings to show market pricing dynamics [4], while others focus on post‑subsidy consumer bills or long‑run federal budget effects [1] [3]. Projections also vary by which baseline year and dataset researchers use, and by whether they account for potential policy responses (state actions, emergency stops, or Congress renewing subsidies). Political actors frame these numbers differently: advocates stress household impacts and uninsured increases [3] [7], insurers highlight a return to market pricing pressures [4], and budget‑centric groups emphasize fiscal trade‑offs [8]. Each viewpoint is accurate about its metric but can obscure others.
5. Bottom line for policymakers, enrollees and the public: choices determine the outcome
If Congress or other actors do not extend enhanced tax credits, evidence indicates large increases in consumer premium payments in 2026 and millions more uninsured over the coming decade, with acute burden on lower‑income and older enrollees [1] [2] [6]. Insurer rate requests imply market pricing shifts of roughly 18–20%, but the more consequential figure for households is the projected 75–114% average rise in out‑of‑pocket premiums across studies, which could be higher for many families [4] [5]. Policy choices — renewal of subsidies, state interventions, or targeted assistance — will determine whether these projections materialize. All analyses agree on the core fact: the subsidy cliff would be a major affordability shock unless addressed. [3] [7]