ACA Tax Credits Expire, Driving Premium Hikes and Coverage Loss Risks Nationwide

Enhanced tax credits that had lowered premium costs for most Affordable Care Act (ACA) enrollees expired as 2026 began, triggering steep price increases for millions of Americans who buy insurance on the exchanges. The lapse follows months of political gridlock, including a 43-day government shutdown and failed efforts in Congress to extend the subsidies. Analysts say the change will hit self-employed workers, small business owners, farmers, and others without employer coverage especially hard in a year when affordability and health costs rank among voters’ top concerns.

The expanded subsidies—introduced in 2021 during the COVID-19 pandemic and later extended—had capped premium costs and broadened eligibility for middle-income households. With their expiration, average premiums for more than 20 million subsidized enrollees are rising by about 114% in 2026, according to KFF, with many facing monthly increases of hundreds of dollars. Some enrollees say they will try to absorb the higher costs, while others report premiums jumping from under $100 to several hundred dollars a month, forcing difficult choices or the prospect of dropping coverage altogether.

Researchers warn that millions of people, particularly younger and healthier Americans, may leave the ACA marketplace due to higher prices, potentially leaving a smaller, sicker risk pool and further raising costs. Florida and Texas—home to the largest ACA enrollee populations—are expected to see some of the biggest effects. Although a House vote on a three-year subsidy extension could come in January, the outlook remains uncertain after similar proposals stalled in the Senate. Meanwhile, many Americans facing surging premiums say they want the subsidies restored and are calling for broader reforms to make health care more affordable.

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