Expiration of Enhanced ACA Subsidies Threatens Coverage and Strains State Budgets

The potential expiration of Enhanced Health Insurance Tax Subsidies (EHITS), introduced under the Affordable Care Act (ACA), poses significant risks to Medicaid and SNAP benefits, state economies, and budgets nationwide.

These subsidies, which cap insurance premium costs relative to income, have substantially increased ACA enrollment from 11 million to 23.4 million since 2014, making health coverage more affordable. Without extension, premiums are projected to more than double in 2026, causing an estimated 1.5 million Americans to lose coverage that year and 3.8 million by 2035 due to unaffordability.

States that did not expand Medicaid will be especially vulnerable to these effects, with rural hospitals facing revenue declines of $1.6 billion and margin reductions of 10% in 2026. Individual and family premium increases will be substantial; for instance, a 60-year-old couple in Pennsylvania could see annual premiums rise from $7,032 to $35,712, representing a significant portion of household income.

The Congressional Budget Office estimates that extending EHITS will increase the federal deficit by $350 billion over ten years, highlighting the fiscal trade-offs involved. Current political discussions include a scheduled Senate vote on the extension, reflecting ongoing debate over balancing affordability with national budget concerns.

The situation underscores the broader challenges in U.S. healthcare regarding high costs, profitability in the insurance industry, and the need for systemic reform to enhance long-term affordability and access.