How would the end of expanded subsidies affect average marketplace premiums and enrollee costs in 2026?
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Executive summary
If Congress allows the temporary “enhanced” premium tax credits to expire at the end of 2025, multiple analyses and insurer filings project large increases in what marketplace enrollees pay in 2026: KFF estimates average subsidized enrollee premium payments would more than double (a 114% increase, about $1,016 per person annually) [1] [2]. Insurers and researchers also expect higher gross benchmark premiums driven by a smaller, sicker risk pool — filings and CBO-based estimates point to premium increases in the single digits to low double digits, and to millions losing coverage (examples: ~7% filings in Vermont; CBO projection of 2.2 million fewer insured) [3] [4].
1. What changes legally happen on Jan. 1, 2026 — the baseline scenario
Under current law the “enhanced” premium tax credits (expanded by ARPA and extended by later legislation through 2025) are scheduled to end on January 1, 2026; that means subsidy eligibility and subsidy caps revert to the original ACA rules unless Congress acts to extend or change them [5] [2]. The post‑2025 baseline reduces income eligibility and raises the fixed share of income enrollees must pay for benchmark silver plans (for 2026 the IRS caps would limit required contributions starting at 2% of income at 100% FPL up to about 9.96% for those 300–400% FPL under pre‑enhancement law) [5] [6].
2. Direct effect on average enrollee premium payments: KFF’s headline estimate
KFF’s modeling shows that if enhanced credits expire, average annual premium payments among subsidized enrollees would rise about $1,016 in 2026 — a 114% increase from the $888 average in 2025 to roughly $1,904 in 2026 — meaning on average subsidized enrollees would more than double what they pay for premiums [1] [2].
3. Insurer rate filings and local examples: modest to material gross premium increases
Insurers’ 2026 filings give early state‑level signals: Blue Cross Blue Shield of Vermont and MVP projected that expiration would raise gross premiums by roughly 6–7% in Vermont, while other carriers in states like Oregon reported projections ranging roughly 1–5% — signaling that gross premium effects vary by state and by market structure [3]. These filings attribute increases to an expected exit of healthier enrollees and worsening risk mix [3].
4. Broader estimates: CBO and health policy groups on marketwide effects and coverage loss
Analysts relying on CBO and other federal estimates project both higher gross benchmark premiums and significant coverage losses. The AHA summarized that CBO's baseline assumes the enhanced credits expire and estimated 2.2 million consumers would lose coverage in 2026; CBO also projects higher gross benchmark premiums (example: a 4.3% bump in 2026 and 7.9% on average 2026–2034 in one AHA summary) [4]. Bipartisan Policy Center cites CBO’s view that keeping enhancements would lower gross premiums about 7.6% on average versus the baseline, implying the reverse when enhancements expire [7].
5. Who bears the brunt: distributional snapshots and dramatic individual examples
Several analyses stress uneven effects: middle‑income and older enrollees who had benefited from the “no cliff” protection face the largest dollar jumps. KFF and Bipartisan Policy Center examples show scenarios where 40‑year‑olds and older couples could see thousands or tens of thousands more in annual premiums in some circumstances (KFF: roughly $2,000 more annually for a 40‑year‑old earning $50,000 in one example; BPC: a 60‑year‑old couple at ~402% FPL facing very large bills) [8] [7] [9].
6. Why premiums rise even for people without subsidies
Multiple sources explain that expiration narrows and sours the risk pool as healthier, subsidized enrollees may drop coverage, pushing up gross benchmark premiums for everyone in the market. The CBPP and insurer filings emphasize that spillover increases hit unsubsidized enrollees too, so even people not receiving tax credits could face higher sticker prices [3] [10].
7. Political and fiscal context — competing priorities and tradeoffs
Policy briefs note clear tradeoffs: extending enhanced credits lowers enrollee costs and can reduce gross premiums via a healthier pool but increases federal spending (BPC cites CBO estimating a large deficit impact for a permanent extension and increased coverage) [7]. Political debates reflect competing frames: Democrats highlight thousands‑of‑dollars increases for middle‑income families; Republicans emphasize fiscal cost and benefits going to higher earners — FactCheck documents both claims and finds wide variation by case and locality [9] [10].
Limitations and what sources do not say
Available sources provide modeled and filing‑based projections but do not deliver a single nationwide “premium increase” number that will occur everywhere; state market structure, local costs, and Congressional action could change outcomes [3] [1]. Sources do not claim precise realized 2026 numbers after any late legislative action — actual 2026 premiums will depend on insurer filings, state policies, and any Congressional or administrative changes not covered in the cited pieces (not found in current reporting).