What is the impact of enhanced ACA subsidies on enrollment rates among people earning 100–250% of the federal poverty level?
Executive summary
Enhanced ACA premium tax credits (expanded under ARPA and extended through 2025) roughly doubled marketplace enrollment from 2020 to 2025 and drove especially large gains among people with incomes between 100–250% of the federal poverty level (FPL) — enrollment in that band grew by about 143% between 2021 and 2025, according to the Center on Budget and Policy Priorities and others [1] [2]. Available reporting ties those enhanced subsidies to lower net premiums (KFF shows average subsidized enrollees paid about $888 annually in 2024–25) and warns that letting enhancements expire would raise out‑of‑pocket premiums and likely reduce enrollment in the 100–250% FPL group [3] [1] [2].
1. Why the 100–250% FPL band matters: affordability and percent growth
Policy analysts emphasize the 100–250% FPL range because those households have the highest sensitivity to premium price changes and benefited most in absolute enrollment growth after ARPA’s enhancements. CBPP and related analyses show the enhanced credits materially increased affordability and contributed to a surge in enrollment; specifically, enrollment among people with incomes between 100 and 200 percent of FPL rose by about 143% from 2021–2025, and analysts report strong enrollment increases for below‑250% groups as well [1] [2]. These gains reflect both larger subsidies per person and the income‑linked subsidy formula that reduces net premiums most for lower incomes [4].
2. How enhanced subsidies changed out‑of‑pocket premiums for low‑income enrollees
KFF and CMS‑based reporting indicate the enhanced credits cut average net premium payments substantially — KFF reports the average premium payment net of tax credits among subsidized enrollees held near $888 annually in 2024–25 because of the enhancements [3]. Other organizations quantify likely spikes if enhancements lapse: Commonwealth Fund and Health Affairs analyses project net premium increases in the range of roughly 25%–100% for eligible enrollees and warn millions could become uninsured if subsidies are not extended [2] [4]. Thus, in the 100–250% FPL band, people would face higher monthly costs and some would drop coverage or be unable to enroll.
3. Enrollment elasticity: the expected enrollment response to higher premiums
Multiple analyses tie price sensitivity to enrollment declines. The Congressional Budget Office and CBPP projections used by analysts estimate marketplace enrollment would fall markedly if enhanced credits end (for example, CBO projections cited by CBPP suggest a drop from ~22.8 million in 2025 to ~18.9 million in 2026 under lapse scenarios) — a pattern that would disproportionately affect lower‑income enrollees who are most price‑sensitive [1] [2]. Commonwealth Fund and AJMC pieces estimate several million could lose coverage [2] [5]. Available sources therefore link higher net premiums directly to reduced enrollment among the 100–250% FPL cohort [2] [1].
4. Geographic and demographic nuance: not all low‑income enrollees are equally affected
Reports stress heterogeneity: states with big pre‑subsidy premiums (and non‑Medicaid expansion states) and older adults within income bands face larger dollar increases, and enrollment gains since 2021 were concentrated in particular states (KFF, CNN, Health Affairs) [1] [6] [4]. CBPP and other groups note that the enhanced credits helped reduce racial disparities in coverage by boosting enrollment among Black and Latino communities, implying a lapse could reverse some of those gains among low‑income groups [1].
5. Counterarguments and uncertainty in projections
Analysts differ on scale: estimates of coverage loss range (CBO, CBO‑based CBPP, Commonwealth Fund) and depend on modeling assumptions about premium increases, insurer behavior, and whether Congress or states act. FactCheck.org stresses that headlines like “premiums will double for over 20 million people” refer to averages and that individual impacts vary by age, location, and plan choice [7]. HealthInsurance.org and other outlets also note state actions (reinsurance, state subsidies) could blunt the effect in some places [8] [9].
6. What the evidence does not say (limitations)
Available sources do not provide a single definitive elasticity number for enrollment specifically within the 100–250% FPL band in 2026 under every scenario; instead they offer model ranges and state‑level variation [1] [2]. Sources also do not settle whether Congressional action during open enrollment would fully reverse early 2026 price signals or market responses; some analyses note industry filings already assume lapse effects, which complicates later policy fixes [10] [1].
7. Bottom line for readers deciding whether to shop or change coverage
If enhanced subsidies are not extended, people earning 100–250% of FPL should expect higher after‑subsidy premiums and a meaningful risk that some peers in that income range will stop enrolling — analyses project steep net premium increases and corresponding enrollment declines, with pronounced state and demographic variation [2] [1]. Conversely, if Congress or states act to restore or replace enhanced assistance, many of the affordability and enrollment gains for the 100–250% FPL group would likely be preserved [10] [4].