How would ending 2026 ACA premium tax credits change average marketplace premiums by income bracket?
Executive summary
If Congress allows the enhanced ACA premium tax credits to expire after 2025, KFF estimates average marketplace enrollees’ annual premium payments would rise by 114% (about $1,016 a year) and insurers’ proposed rate filings show an additional median premium increase of about 18% for 2026 [1] [2]. The effect is highly concentrated by income: people under ~400% of the federal poverty level would still get smaller credits under pre‑ARP rules while those above 400% could lose subsidies entirely, producing much larger dollar increases for middle‑income and older enrollees [3] [4].
1. Who gains and who loses: the income cliff that returns
Under the temporary enhancements from ARPA/IRA (2021–25) many people above 400% FPL received help if premiums exceeded 8.5% of income; letting the enhancements lapse restores the original ACA subsidy rules, which limit subsidies to 100–400% FPL and use a steeper required‑contribution scale (for 2026 the IRS/CRFB guidance would cap required contributions at 2% of income at 100% FPL rising to about 9.96% at 300–400% FPL) [3] [5]. That means households above ~400% FPL risk losing all premium help and face the so‑called “subsidy cliff” in 2026 [6] [7].
2. Average impact: premiums more than double on average — but that hides variation
KFF’s calculator and analysis projects an average enrollee premium payment increase of roughly 114% (about $1,016 annually) if enhanced credits expire; that figure combines changes in subsidy amounts with insurer rate changes [1] [8]. At the same time insurers’ filings show a median proposed premium increase of ~18% for 2026 driven by health‑cost pressures and market assumptions—so the real 2026 increases are the combination of higher pre‑subsidy premiums and reduced subsidy assistance [2] [1].
3. Dollars by income bracket: examples reported in the research
Sources give concrete illustrative examples rather than a full bracketed table. KFF shows a 60‑year‑old couple at ~402% FPL (about $85,000) could see annual premiums rise by over $22,600 in 2026, moving from ~8.5% of income under enhanced credits to roughly 25% without them — an extreme middle‑income hit [8] [9]. KFF also cites lower‑income examples: a 45‑year‑old earning $20,000 (≈128% FPL) in a non‑expansion state could go from $0 to about $420 per year without the enhanced credits [8]. Other reporting gives an example of a 40‑year‑old earning $50,000 paying about $2,000 more annually in 2026 if enhancements lapse [10].
4. Why impacts differ by income, age and state
The size of the subsidy is tied to the benchmark (second‑lowest cost Silver) plan in a given zip code and to household MAGI and size; older enrollees face much higher pre‑subsidy premiums, so losing subsidies hits them harder in dollars. States with higher underlying premiums magnify the impact, and some insurers explicitly built an extra 4 percentage points (on average) into 2026 filings to reflect expected expiration of enhanced credits [2] [11]. Urban Institute and CBO projections further underscore geographic and demographic variation in coverage loss and premium burden [12] [13].
5. Scale and downstream consequences beyond premiums
Analysts predict large coverage and economic effects: Urban Institute estimates millions could lose coverage and the Commonwealth Fund updates project a $31 billion decline in federal premium tax credit funding in 2026 if enhancements expire, with consequent job and uncompensated‑care impacts [12] [13]. The CBO estimated uninsured increases of multiple millions in related analyses cited by CBPP, which also warns of higher uninsured counts depending on the timing of congressional action [14] [12].
6. Competing narratives and implicit agendas in the sources
Nonprofit research groups (KFF, Peterson‑KFF, CBPP, Commonwealth Fund, Urban Institute) frame the lapse as causing sharp consumer pain and coverage loss and use insurer filings and IRS guidance to model impacts [1] [2] [12] [15]. Industry‑adjacent actors (insurers, Blue Cross pages) emphasize premium changes and advise consumers on planning while sometimes downplaying policy as one of multiple drivers [16] [17]. Reports from policy‑budget groups (CRFB) focus on the mechanics of the applicable‑percentages and federal budget tradeoffs rather than only consumer effects [3] [5].
7. Limitations and what reporting does not say
Available sources provide illustrative examples and averages but do not publish a comprehensive, authoritative matrix showing exact average premium changes for every income bracket and state; detailed household impacts depend on age, household size, and zip code and require individual calculator runs (KFF’s calculator and state filings are tools for that) [1] [2]. Sources do not provide a single official federal estimate of “average change by each income bracket” across all markets—analysts construct estimates from insurer filings, IRS caps, and modeling assumptions [1] [2] [3].
Bottom line: letting the enhanced premium tax credits expire will on average more than double out‑of‑pocket marketplace premium payments, but the burden is concentrated — modest dollar increases for some lower‑income enrollees and catastrophic dollar hits for many middle‑income and older households (examples: ~$1,016 average rise, couple at 402% FPL facing ~$22,600 increase) — and precise effects vary by age, household size, and state market [1] [8] [2] [3].