How would ending enhanced subsidies impact marketplace premiums, uninsured rates, and federal budgets?

1. A sudden premium shock: who pays more and how much

Multiple analyses show that, if the enhanced premium tax credits expire, the average marketplace enrollee’s out‑of‑pocket premium burden would spike — KFF and Urban Institute put the average increase at about 114%, from $888 in 2025 to $1,904 in 2026 — because the credits currently cap household contributions and broaden eligibility ^{[1] [4] [2]}. State and insurer rate filings show variation — some insurers expect only small impacts (1–5% on pre‑subsidy premiums in a few places), but most analysts expect meaningful increases in post‑subsidy amounts paid by consumers and large premium bills for older or higher‑income households that lose eligibility ^{[2] [7]}.

2. Millions at risk of losing coverage; uneven geographic and demographic effects

Federal and academic projections agree that millions would drop marketplace coverage and many would become uninsured if enhancements lapse: the Congressional Budget Office projects marketplace enrollment falling from ~22.8 million in 2025 to 18.9 million in 2026 and estimates roughly 4–4.2 million more uninsured over the next decade, while the Urban Institute estimates a sharper one‑year shock with 7.3 million losing marketplace coverage in 2026 (about 4.8 million of whom would become uninsured) ^{[3] [1] [4]}. Analyses note the impacts would be concentrated in states with higher premiums and the non‑Medicaid expansion states; Black and Hispanic populations are projected to see larger coverage losses in some studies ^{[3] [4]}.

3. Market dynamics: smaller risk pool, higher pre‑subsidy premiums

Analysts warn that expiration would shrink the individual market as healthier enrollees opt out, leaving a sicker, more expensive pool for remaining insurers. That selection effect is expected to lift pre‑subsidy premiums by a modest amount — CRFB cites CBO‑based estimates of about a 5% increase in pre‑subsidy premiums — but the dominant effect for consumers is the loss of subsidy offsetting their bills, producing the much larger net premium increases ^{[8] [9]}. Some insurers and states project smaller or varied changes locally, underscoring geographic heterogeneity ^[2].

4. Federal budget tradeoffs: saving vs. spending and projected costs

There is a clear budgetary tradeoff. Letting the enhancements end reduces near‑term federal outlays tied to premium tax credits; conversely, making them permanent would increase federal spending significantly — CBO/JCT estimates cited by KFF put the 10‑year net cost of making the enhanced subsidies permanent at roughly $335 billion (about $275 billion in outlays and $60 billion in revenue reductions) ^[5]. CRFB and other budget analysts also estimate permanent extension could cost roughly $350 billion over FY2026–2035, and note some of that spending flows to higher‑income households and may indirectly raise provider or insurer revenues ^{[9] [8]}.

5. Political and policy context: alternatives, timing, and uncertainty

Congressional action — extension, modification, or replacement — remains possible and would change these outcomes; current legislative packages (as of November 2025 reporting) left the question unresolved and only promised further votes, meaning insurers already face uncertainty in setting 2026 rates and consumers may react to early rate notices ^{[10] [2]}. Policy alternatives discussed range from full extension to narrower reforms (e.g., targeting, capping cost, adjusting eligibility), each with different budget and coverage consequences noted by policy think tanks and Congress’ CRS ^{[11] [9] [7]}.

6. What reporting agrees on and where estimates diverge

Reporting and researchers uniformly agree on direction: expiration raises consumer premiums, shrinks enrollment, and reduces federal spending versus extension. They diverge on magnitude: CBO’s multi‑year projection centers on ~4–4.2 million additional uninsured over the decade and a 3.9‑million drop in immediate enrollment, while Urban Institute’s single‑year modeling finds a larger one‑year shock (millions more losing coverage in 2026) and differing job‑loss and economic impacts. Local insurer filings show smaller impacts in some states, highlighting heterogeneity ^{[1] [4] [3] [2] [6]}.

Limitations: available sources model different timeframes and assumptions (permanent extension vs. one‑year lapse), so precise counts vary by method; the sources do not spell out every behavioral response (for example, employer‑sponsored coverage shifts) in uniform detail ^{[4] [3] [2]}.