What will happen to enrollee out-of-pocket costs if premium tax credits expire in 2026?
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Executive summary
If enhanced premium tax credits (ePTCs) expire after December 31, 2025, enrollees buying coverage on the ACA marketplaces will face substantially higher out‑of‑pocket premium costs — KFF estimates average annual premium payments would more than double from $888 in 2025 to $1,904 in 2026 (a 114% increase) [1] [2]. Multiple analyses project net premiums for some groups nearly doubling or more, steep enrollment losses, and insurer rate filings that bake in additional premium increases tied to the credit’s expiration [3] [4] [5].
1. What the law would and would not do: the credit itself remains, the enhancements expire
The baseline premium tax credit created under the ACA continues to exist after 2025; what expires under current law are the temporary enhancements put in place by ARPA/IRA that expanded eligibility and increased subsidy amounts through 2025 [6] [7]. Available sources do not mention any automatic extension in law — Congress must act to extend or make the enhancements permanent [6] [7].
2. Direct effect on enrollee premiums: big increases in out‑of‑pocket payments
Analysts find the immediate, direct effect is much higher enrollee premium payments. KFF’s October 2025 estimate shows average subsidized marketplace enrollees would see annual premiums rise from $888 in 2025 to $1,904 in 2026 if ePTCs expire — a 114% jump [1] [2]. KFF’s scenario and related briefings show illustrative examples where middle‑income enrollees would move from low or zero net premiums to substantial annual costs [5].
3. Indirect effects that worsen costs: insurers’ rate filings and market pricing
Insurers are already incorporating the expected policy change into 2026 proposed rates. Early 2026 filings in several states and DC include an average additional 4 percentage points of premium increase attributable to the expected expiration, on top of other drivers [8] [4]. Nationally, analysts reported insurer filings proposing median rate increases around 18% for 2026 — meaning gross premiums could rise independent of subsidy changes, compounding higher out‑of‑pocket costs for enrollees [5] [7].
4. Who is hit hardest: middle‑income and newly eligible groups under the enhancements
The enhancements extended subsidies to people above 400% of the federal poverty level and capped required contribution percentages; if those enhancements lapse, enrollees above 400% FPL who had been receiving credits would see net premiums nearly double in some estimates (from $4,436 to $8,471 for one group) [3]. Bipartisan Policy Center and other analyses show older adults and middle‑income families could face very large premium burdens — one example: a 60‑year‑old couple near 402% FPL could face premiums equaling roughly a quarter of income rather than ~8.5% under the enhancements [7].
5. Coverage consequences: large projected losses of coverage and higher uncompensated care
Projections vary but consistently point to big coverage losses if enhancements expire. The Urban Institute projects millions losing marketplace coverage (and net premiums for some groups nearly doubling), while other estimates range from 3.8 million to 4.8 million additional uninsured people in 2026 in different CBO/Urban Institute scenarios [9] [3]. The Commonwealth Fund and Urban analyses link those coverage losses to higher uncompensated care costs and broader economic impacts, including job effects and reductions in federal spending on subsidies [10] [9].
6. Political and policy context: Congress weighs difficult tradeoffs
Policy briefs note Congress faces a choice between stabilizing coverage (and increasing federal spending) or allowing savings to the federal budget while accepting higher premiums, coverage losses, and downstream costs like uncompensated care [7] [9]. Legislative proposals have been introduced to extend ePTCs for limited timeframes, reflecting competing priorities on coverage versus deficit control [7].
7. What consumers can expect and immediate actions
For plan year 2026, expect two effects: higher gross premiums proposed by insurers (median proposals around 18%) and smaller or no ePTC help for many enrollees, which together drive steep increases in what consumers actually pay [5] [4]. Analysts recommend enrollees review plan options during open enrollment and use tools (KFF’s calculator) to estimate changes; regulators in some states required dual rate filings to show scenarios with and without the enhancements so consumers and policymakers can compare [5] [4].
Limitations and competing viewpoints: estimates differ by model, geography, and enrollee demographics; KFF, Urban Institute, Commonwealth Fund, Bipartisan Policy Center and insurer filings all reach broadly consistent conclusions about larger enrollee costs but differ in magnitude and downstream projections [1] [3] [10] [7] [8]. Available sources do not mention any administrative fix that would automatically prevent these premium increases absent Congressional action (not found in current reporting).