Which groups benefited most from the extra ACA COVID subsidies under Biden?
Executive summary
The Biden-era “COVID” enhancements to ACA premium tax credits sharply expanded eligibility and generosity from 2021 and were extended through 2025, producing an estimated federal gross cost near $138 billion in 2025 and driving enrollment from ~12 million in 2021 to roughly 23–24 million by 2025 [1] [2]. The largest beneficiaries were low- and middle‑income households (including those between 100–150% FPL who often paid $0 premiums), older near‑retirees and households above the pre‑ARPA 400% FPL cap who gained new eligibility, and insurers who received the subsidies directly [1] [3] [4].
1. Who the policy was designed to help — and who it did help
Congress and the Biden administration intended the enhanced premium tax credits to reduce premiums and expand access for low‑ and middle‑income Americans; the changes capped consumer premium contributions and increased subsidies across the income distribution, making many plans free for households between 100–150% of the federal poverty level (FPL) and lowering contributions at higher income tiers [1] [3]. Independent analyses and advocacy groups report that most marketplace enrollees received subsidies—about 90% on HealthCare.gov—and families saved on average roughly $67 per person per month under the enhanced rules [4].
2. The concrete winners: low‑income enrollees and those between 100–150% FPL
The clearest gainers were people with incomes between 100% and 150% FPL: the enhancements frequently produced fully subsidized plans (zero premiums) for that group, shifting the benchmark premium cost to taxpayers [3] [1]. Reports cite that these cohorts accounted for a substantial share of newly “fully subsidized” enrollees and that fully subsidized enrollment rose materially under the COVID credits [3].
3. Middle‑income and formerly ineligible households — the newly subsidized
A central change removed or relaxed the pre‑ARPA income cap (400% FPL), extending subsidies to higher incomes and reducing required premium shares across mid‑income bands; as a result, some households above the historic 400% threshold qualified for material subsidies and saw steep reductions in premiums [1] [5]. Case studies and analyses note particularly large dollar‑value subsidies for older middle‑income or early‑retiree households—examples include couples in their 50s receiving five‑figure premium credits in 2025 under the expanded rules [6].
4. Insurers received the money — and risked windfalls from low‑utilizers
Because premium tax credits are paid directly to insurers to lower enrollee premiums, insurers were the proximate recipients of the federal payments. Critics and some analysts point to a high share of subsidized enrollees who made no claims (e.g., CMS reported many zero‑claim enrollees in 2024), arguing that taxpayers financed premiums for people who generated little insurer expense; advocates counter that broad enrollment stabilizes markets and spreads risk [7] [3]. Estimates place the gross federal cost of subsidies at roughly $138 billion in 2025, illustrating the scale of payments flowing through insurers [1].
5. Disputes over improper enrollment and “phantom” enrollees
Several policy‑oriented groups and think tanks argue the expansion produced improper or “phantom” enrollees—people doubly covered or reporting incomes that make them ineligible—citing CMS data and conservative analyses estimating millions of problematic enrollments and billions in questionable payments [8] [7] [3]. Conversely, mainstream nonpartisan analysts emphasize that expanded eligibility materially reduced premiums and increased coverage; both perspectives use the same enrollment and cost figures but draw different policy conclusions [5] [1].
6. Who would lose most if the enhancements sunset
If the enhanced credits expire as scheduled, households above 400% FPL would generally lose eligibility and many lower‑ and middle‑income enrollees would face reduced subsidies and sharply higher out‑of‑pocket premiums: KFF and other trackers warned of large premium increases for those groups, and policy briefs show specific examples—e.g., a family of four at 140% FPL moving from $0 in 2025 to substantial premiums in 2026 under pre‑ARPA rules [5] [1].
7. Competing agendas and the political stakes
Advocates and policy analysts frame the enhancements as lifesaving affordability fixes that increased enrollment and lowered consumer costs [4] [2]. Critics argue the expansions created perverse incentives, fiscal strain, and improper enrollments, and emphasize that subsidies are ultimately paid to insurers and thus can represent large transfers of taxpayer funds [7] [8]. Both sides rely on the same federal enrollment and cost statistics but diverge on whether the tradeoffs justify extending the policy [1] [3].
Limitations: available sources provide robust enrollment and cost estimates and describe who gained eligibility, but do not offer a single, universally agreed‑upon ranking of beneficiaries by dollar amount per group; precise per‑group subsidy totals are analyzed differently across sources [1] [3].