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What happens to health insurance premiums if ACA subsidies expire in 2026?
Executive Summary
If the enhanced Affordable Care Act (ACA) premium subsidies expire in 2026, multiple analyses conclude marketplace premiums would rise sharply and millions would likely lose coverage, with estimates ranging from large premium spikes for subsidized enrollees to several million newly uninsured over the coming decade [1] [2] [3]. Policymakers face a clear trade‑off: letting the subsidies lapse would reduce federal spending but shift substantial costs onto households, particularly lower‑income and older enrollees [4] [5].
1. Big Warning: Premiums Could More Than Double for Many Enrollees
Multiple analyses converge on the finding that post‑subsidy premiums for marketplace enrollees would rise dramatically, with KFF estimating an average increase of 114% from $888 to $1,904 for subsidized enrollees if enhanced credits end in 2026 [1]. The Congressional Budget Office (CBO) projects benchmark premiums would rise by 4.3% in 2026 and average 7.9% annually from 2026 to 2034 when measured gross of subsidies, but the headline impact for consumers is much larger once subsidies are removed, as many low‑ and moderate‑income households currently pay trimmed net premiums that would swell without the credits [2] [4]. These estimates underscore that the sticker shock affects net out‑of‑pocket burdens, not just insurer list prices, and the magnitude varies by analytic method and metric [5].
2. Coverage Fallout: Millions at Risk of Losing Insurance
The analyses uniformly forecast a sizable coverage decline if enhanced tax credits expire: the CBO and related summaries estimate roughly 2.2 million people could lose coverage in 2026 alone, with about 3.8 million annually and up to 4 million more uninsured by 2034 relative to extended subsidies [2] [6]. Other overviews place the cumulative uninsured increase near 4 million over a decade, highlighting a substantial reversal of the ACA’s gains in coverage expansion [3]. The projected losses combine people dropping marketplace plans due to affordability and some erosion of stability for insurers, which can feed back into narrower networks and higher premiums, driving further disenrollment [6].
3. Who Would Suffer Most: Older, Lower‑Income, and Middle‑Class Households
Analysts emphasize that lower‑income households just above Medicaid thresholds and older adults in their 50s and 60s would be hit hardest because subsidies currently target those groups and because older enrollees face higher baseline premiums [7] [5]. KFF and media summaries warn that some households might face unaffordable increases, with anecdotal scenarios of premium hikes exceeding $20,000 annually for certain older, middle‑class individuals in high‑cost markets [7]. The result is uneven hardship: households above 400% of the Federal Poverty Level already receive no subsidies and remain exposed, but the sharpest percentage increases occur for those who today rely most heavily on enhanced credits [5] [8].
4. Fiscal Tradeoffs and Insurer Market Dynamics Revealed
Letting enhancements lapse would reduce federal outlays, a point emphasized in Congressional summaries noting lower federal spending if subsidies expire [4]. However, analysts warn this fiscal saving comes with market instability risks: higher net premiums can shrink enrollment, concentrate sicker enrollees among remaining buyers, and pressure insurer finances and provider networks—potentially raising rates further or causing market exits [6] [2]. Some pieces frame the debate as a budgetary versus access trade‑off, signaling political agendas: fiscal conservative analyses stress cost containment [5], while health policy groups highlight access and affordability harms [1].
5. Diverging Numbers, Same Direction: Why Estimates Vary but Conclusions Align
The different studies use varying metrics—gross benchmark premiums, average net premiums for subsidized enrollees, and multi‑year coverage projections—which explains numeric differences: the CBO’s +4.3% 2026 gross premium rise contrasts with KFF’s 114% post‑subsidy consumer premium jump because one measures list prices and the other measures consumer outlays after subsidies [2] [1]. Despite methodological variation, all sources point to substantial consumer pain and several million newly uninsured if subsidies end, a convergence that strengthens the overall conclusion even as precise figures differ [5] [8].
6. Bottom Line and Policy Implications: Clear Stakes for 2026 Decisions
The assembled analyses make the stakes unambiguous: letting ACA enhanced premium tax credits expire in 2026 would materially increase premiums for many enrollees and raise the uninsured rate by millions, especially among older and lower‑income Americans. Policymakers choosing whether to extend subsidies must weigh immediate federal savings against demonstrable harms to affordability and coverage stability documented across these sources [6] [3] [1]. The convergent evidence across independent analyses provides a robust factual basis for that policy debate, even as numbers vary by analytic framing.