Expiration of ACA Subsidies Drives 2026 Premium Increases and Market Uncertainty

The expiration of enhanced premium tax credits under the Affordable Care Act (ACA) is set to significantly increase health insurance premiums for millions of Americans in 2026. Senate rejection of a proposal to extend these COVID-era subsidies means that enrollees will face average premium increases of 114%, dramatically impacting affordability. Consumers must select their ACA plans by December 15, 2025, for coverage beginning in January 2026, with many reassessing their insurance options due to higher costs. This shift places pressure on households, particularly those with chronic health conditions, to balance rising premiums with out-of-pocket expenses, potentially leading to the downgrading of plans and postponement of necessary medical procedures. A substantial portion of ACA enrollees are considering switching to less comprehensive coverage or even dropping insurance if costs double, according to recent KFF surveys. The political debate around maintaining these subsidies involved attempts to include the premium tax credits in the federal budget, followed by a 43-day government shutdown. Although some bipartisan support emerged, the Senate vote fell short of the threshold needed to prolong the subsidies. This legislative uncertainty has caused widespread disruption and urgency among consumers. States operating their own exchanges are actively informing consumers about enrollment deadlines and encouraging reassessment of plan options. Analysts advise reviewing ACA accounts promptly and considering plan levels that balance cost and coverage. This expiration affects all segments of the health insurance market, with employer-sponsored insurance also expected to observe significant rate hikes in 2026. The increased financial burden is anticipated to heighten the uninsured population, particularly in states like Florida, where millions rely on premium tax credits. Advocacy groups warn that rising premiums could lead to coverage losses and more individuals foregoing needed medical care. The broader insurance market is bracing for affordability challenges driven by the cessation of these federal subsidies.