How much would ending ACA subsidies raise premiums and deductibles by state?
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Executive summary
If Congress allows the ACA’s enhanced premium tax credits to expire Dec. 31, 2025, independent estimates project large, state-by-state premium and deductible increases — KFF finds average marketplace premium payments would rise 114% (to $1,904 from $888) and premiums “would more than double” for most enrollees [1] [2]. State-level impacts vary: some state calculations (e.g., Connecticut) show average annual premium increases of about $2,380, while national estimates foresee many enrollees facing increases exceeding $1,000 a year [3] [4].
1. What’s expiring, and why it matters
The “enhanced” premium tax credits created by ARPA in 2021 and extended by the Inflation Reduction Act through 2025 lower required household premium contributions and expanded eligibility (including for some people above 400% of the poverty line); those enhancements are scheduled to end Dec. 31, 2025 unless Congress acts [5] [6]. The reversion would restore the pre‑ARPA applicable percentage schedule and the 400% FPL cutoff for many enrollees, meaning subsidy amounts shrink or vanish and out‑of‑pocket premium bills for marketplace enrollees rise sharply [5] [7].
2. National headline numbers: premiums more than double for many
KFF’s modeling shows the average premium payment among subsidized enrollees held at $888 in 2024–2025 and would jump 114% to about $1,904 in 2026 if the enhancements lapse — a more‑than doubling of out‑of‑pocket premium costs on average [1] [8]. Multiple analysts and advocacy groups echo that the average enrollee would face well over $1,000 in additional annual costs if the credits lapse [4] [2].
3. State variation: some states face much bigger dollar hits
State effects differ by local premiums, incomes, and enrollment. For example, Connecticut officials estimated a $2,380 average annual premium increase for residents if the subsidies lapse [3]. KFF’s interactive calculator produces zip‑code and family‑specific estimates and was updated to reflect 2026 premium filings; it shows wide geographic variation driven by local rate increases and income distributions [1].
4. Deductibles, plans and the “insurer letter” evidence
Beyond premiums, some people have seen insurer notices showing much higher premiums and much higher deductibles if subsidies go away — one small‑business owner reported a projected 2026 plan costing $1,500/month with a $7,200 deductible without the enhanced credit [9]. That anecdote reflects how plan pricing and plan selection interact with subsidies: when subsidies fall, people tend to face higher net premiums and some will shift to cheaper plans with higher deductibles or forgo coverage entirely [9] [2].
5. Who gains and who loses under the current rules — and what the analyses disagree about
Analysts agree enhanced credits have substantially reduced average premiums and expanded eligibility [6] [7]. Where sources diverge is on magnitude and timing: KFF’s projections emphasize a 114% jump in average premium payments [1] [2], while other modeling (e.g., some CBO scenarios cited in policy blogs) notes smaller direct premium level effects on insurer pricing if subsidies are extended after rate‑setting deadlines, because some premiums may already be set — CBO estimated a potential 2.4% premium reduction from late subsidy action in one scenario [10]. In short: immediate household costs rise sharply per KFF; the downstream effect on insurer premiums nationally depends on timing and insurer pricing decisions [1] [10].
6. Policy responses on the table and their tradeoffs
Democrats have pushed multi‑year extensions to avoid the “subsidy cliff”; Republicans have proposed alternatives that would redirect some dollars into health savings accounts instead of the enhanced credits [8] [11]. Analysts warn that ending the enhancements would increase the uninsured population and shift costs to hospitals and states; proponents of replacement approaches argue HSAs could help pay out‑of‑pocket costs but would not replicate the broad purchasing power of premium tax credits [7] [11] [4].
7. Limitations and what reporting does not yet answer
Available sources provide national averages, illustrative state examples (e.g., Connecticut), and calculators for localized estimates, but comprehensive, uniformly comparable state‑by‑state tables of both projected premium and deductible changes under every income and family configuration are not included in the materials provided here; users should run KFF’s updated state/zip calculator for precise local estimates [1] [2] [3]. Also, sources note modeling assumptions (rate increases, plan choices) vary and that timing of legislative action affects insurer pricing — meaning final 2026 outcomes could differ from current projections [1] [10].
Bottom line: the consensus in the cited reporting is stark — letting the enhanced ACA premium tax credits expire will raise marketplace premium payments dramatically for most enrollees, with large state and household variation and predictable increases in out‑of‑pocket exposure, including higher deductibles for many [1] [2] [9] [3].