How will the end of 2026 ACA subsidies affect premiums and enrollment in each state?
Executive summary
If enhanced ACA premium tax credits expire at the end of 2025, analysts and federal agencies project big, uneven impacts: average marketplace premium payments would rise roughly 114% (about $1,016 annually) and insurers’ filings and models show gross premiums rising in many states by double‑digit percentages—insurer requests and filings suggest nationwide premium spikes in the high teens to mid‑20s for 2026 (multiple state analyses) [1] [2] [3]. Coverage losses range in estimates from about 2.2 million people in 2026 (CBO) up to millions more in some academic models, with state effects concentrated in Southern states and places that did not expand Medicaid [4] [5] [6].
1. The basic mechanics: why subsidies matter and how their end raises premiums
Enhanced premium tax credits lower what enrollees pay and expanded eligibility removed the “subsidy cliff” above 400% of the federal poverty level; without those enhancements people pay a far larger share of pre‑subsidy premiums and many middle‑income households become ineligible for assistance, which directly increases their out‑of‑pocket premiums and reduces the pool of subsidized enrollees that insurers count on when setting rates [1] [7]. Insurers’ 2026 filings explicitly incorporate the expectation that healthier, subsidized consumers will drop coverage if help disappears—raising gross premiums further because the remaining pool is sicker on average [8] [2].
2. National headline numbers — how many lose coverage and how much premiums rise
The Congressional Budget Office told Congress it expects 2.2 million consumers to lose coverage in 2026 if the enhanced credits aren’t extended [4]. Other research projects much larger shifts: Urban Institute and Commonwealth Fund‑linked estimates model millions more losing marketplace coverage and several million becoming uninsured; KFF’s calculator and related analyses estimate average marketplace premium payments would increase about 114% (roughly $1,016 per year) without the enhancements [4] [5] [1].
3. State differences: who bears the brunt and why
State‑level filings and independent analyses show big variation. Southern states—many of which did not expand Medicaid and lack state reinsurance—are seeing the largest proposed increases (MoneyGeek finds the South averaged ~29% premium growth vs. ~9% in the Northeast) [6]. States with state‑funded subsidies or reinsurance (Vermont, some state markets) expect smaller additional increases tied specifically to subsidy expiration (about 6–7% in Vermont filings) [8]. KFF mapping shows older enrollees above 400% FPL in 46 states would at least double their average annual premium payments without enhanced credits [9].
4. Insurer behavior and timing: why premiums already jumped
Insurers priced 2026 plans assuming no extension in many cases; their rate filings and notices reflect both higher medical costs and an assumed worsening risk pool if subsidies lapse, producing median requested increases around 15–18% across many markets and insurer requests that in some analyses translate to national average hikes in the high teens to mid‑20s [2] [3]. Brookings and other analysts stress a timing effect: late policymaking means insurers already set higher rates rather than awaiting a congressional fix, amplifying sticker shock for shoppers [10].
5. Enrollment dynamics: who will drop coverage and why states matter
Analysts expect younger, healthier people and higher‑income households suddenly facing the “subsidy cliff” to be likeliest to drop marketplace coverage, which both raises premiums and increases uninsured counts; CBO and insurers anticipate enrollment declines, and state marketplaces are projecting local enrollment drops (e.g., Connecticut estimated an 8% enrollment decline absent federal action) [4] [2] [11]. State policy levers—supplementing federal subsidies, maintaining state marketplaces, or adding reinsurance—can blunt these effects [8] [6].
6. Economic and political stakes shaping outcomes
Extending the enhanced credits permanently would cost the federal government (CBO estimates roughly $350 billion over a decade) but would limit coverage losses; opponents stress fiscal cost while proponents emphasize coverage and affordability gains—this tradeoff is explicit in policy briefs and CBO analyses [12] [13]. Political stalemate and shutdown dynamics have already affected marketplaces’ consumer messaging and state planning [14] [11].
7. What remains uncertain and what to watch next
Available sources show wide—but not identical—estimates: CBO’s 2.2 million coverage loss figure sits alongside Urban Institute/Commonswealth models that project larger losses; insurer filings vary by state and could change before final rates are approved [4] [5] [2]. Watch three signals: final state rate approvals, whether Congress acts (or states step in), and enrollment behavior during the Nov–Jan open‑enrollment window—each will determine ultimate premium and uninsured outcomes [15] [16].
Limitations: reporting above synthesizes the cited analyses and filings; available sources do not provide a single, state‑by‑state final premium and enrollment table for post‑2026 outcomes, and projections differ by methodology and timing [8] [2].