How will ending 2026 ACA subsidies affect premiums and coverage enrollment by income level?
Executive summary
If Congress allows the enhanced ACA premium tax credits to expire after 2025, KFF estimates average marketplace premium payments would more than double (+114%, from $888 to $1,904), raising net annual premiums by about $1,016 on average [1]. The Congressional Budget Office and other analysts project enrollment declines of roughly 2–4 million people in 2026 and upward pressure on gross premiums (CBO ~+26% gross premium projection; CBO/CBO-based estimates show 2.2–3.8 million losing coverage in 2026 and later years) [2] [3] [4]. Impacts will be highly uneven by income, age and state: middle‑income households just above 400% FPL and older adults (50–64) face the steepest premium shocks, while lower‑income enrollees and those eligible for Medicaid are affected differently [5] [6] [7].
1. How subsidy expiration translates to higher out‑of‑pocket premiums
The KFF analysis shows that ending the enhanced credits reverts subsidy rules to the original ACA scale and dramatically increases the share of premium paid directly by enrollees — KFF’s national average is a 114% jump in premium payments for subsidized enrollees, roughly $1,016 more per year [1]. Other trackers and insurers report large proposed rate increases driven in part by this policy change: insurers and analysts cite the expiring enhancements as a key driver of proposed 2026 increases, with median insurer filings showing large national rate hikes (insurer filings signal +18% median proposed premium increases nationally; insurers expect additional percentage points because of subsidy expiration) [8] [9].
2. Who loses eligibility — the “subsidy cliff” and the 400% FPL group
Enhanced credits that temporarily removed the hard 400% FPL cutoff will end unless extended, meaning households over 400% FPL will lose eligibility and face the full premium price in 2026 [10] [11]. Estimates put the number of marketplace enrollees above 400% FPL at about 1.6 million who would be exposed to the “cliff” [12]. Media and advisors highlight that thresholds vary by household size — roughly $62,600 for an individual or $128,600 for a family of four was used in some guidance — and that the financial hit is greater for older enrollees in high‑premium states [13] [10].
3. Who may drop coverage — enrollment and risk‑pool effects
Budget office and health‑policy analyses foresee millions losing marketplace coverage if enhancements lapse. The CBO projects an enrollment decline (CBO numbers cited: more than 2 million drop in 2026; other CBO‑based estimates suggest an average annual loss of 3.8 million 2026–2034), and some insurers baked a morbidity adjustment into rates expecting healthier people to leave, which would raise gross premiums further [2] [3] [9]. Peterson‑KFF filings noted insurers assuming a 4 percentage‑point or so premium increase tied to expected departures in some states [9].
4. Income‑level winners and losers: a split picture
Lower‑income enrollees (100–250% FPL) still qualify for basic ACA subsidies and cost‑sharing reductions under the standard ACA scale, so they will continue to get help in 2026 even if enhancements expire — but the required contribution percentages rise under the old scale, leaving them with higher shares of premiums than under the enhanced rules [2] [5]. Middle incomes (200–400% FPL) face larger increases in required contributions and may see substantial out‑of‑pocket rises; older adults, especially 50–64, could face the steepest dollar increases because premiums are age‑rated [5] [6]. Those above 400% FPL will lose subsidies entirely and in many cases see catastrophic premium jumps [10] [12].
5. Geographic and age variation: where sticker shock will be worst
Analyses mapping impacts show state and local variation: older buyers and people in states with high pre‑subsidy premiums (e.g., West Virginia, Vermont, Alaska, Connecticut in some analyses) will be hit hardest, and KFF/Peterson‑KFF maps show pronounced increases for 40‑ and 60‑year‑olds at different income multiples [7] [9]. Insurer filings in some states forecast gross premium increases of 6–7% attributable to the subsidy expiration on top of other cost drivers [9].
6. Secondary effects: premiums, subsidies and the feedback loop
FactCheck and other outlets emphasize a feedback mechanism: when subsidies fall, healthier enrollees are likelier to leave, which leaves a sicker risk pool and pushes pre‑subsidy premiums up; higher gross premiums would then raise the dollar value of subsidies for those who still qualify — but that mechanism doesn’t protect people who lose eligibility entirely [14] [9]. CBO and others project this dynamic will boost gross premiums modestly (CBO projected near‑term gross premium increases and CBO‑based estimates of aggregate premium growth) [2] [4].
7. What the sources don’t settle and key caveats
Available sources do not mention a final Congressional action extending or replacing the enhancements beyond the documents cited; analyses rely on assumptions about insurer behavior, enrollment responses and legal/regulatory changes that were in flux during 2025 filings [1] [8]. Projections vary: KFF emphasizes average net premium jumps for subsidized enrollees (114% average increase in enrollee payments), while CBO‑based analyses focus on aggregate enrollment and gross premium effects [1] [2]. State‑level relief (state subsidies) and legal challenges to administrative rules could change outcomes in specific markets; some states already use state funds to blunt the shock [9].
Bottom line: letting the enhanced credits lapse leaves millions paying sharply more and 2–4 million or more people likely to drop marketplace coverage in 2026, with the worst effects concentrated among those just above subsidy cutoffs, older adults, and residents of high‑premium states [1] [2] [5].