Expiration of ACA Premium Tax Credits to Double Health Insurance Costs in Texas

The expiration of the enhanced premium tax credits under the Affordable Care Act at the end of 2025 is expected to significantly impact health insurance affordability in the United States, notably in Texas. These tax credits, introduced in 2021 and extended three times, helped increase enrollment in the federal health insurance marketplace from 11 million to 24 million individuals, providing critical subsidies for millions. Without these financial supports, an estimated 7.3 million people nationwide will lose subsidized coverage, with Texas seeing more than a 50% reduction in marketplace enrollment. This change will disproportionately affect families and individuals earning between 150% and 700% of the federal poverty level, with some facing monthly premium increases exceeding 100%. For example, a family of four earning less than $48,200 annually would see premiums rise from $0 to $1,928 per month without subsidies. In Tarrant County, over 215,000 people currently benefit from federal marketplace plans, underscoring the local impact of these legislative changes. Legislative efforts remain stalled, with Democrats proposing a three-year extension of premium tax credits and Republicans offering a different plan for health savings accounts to cover deductibles but not premiums. Texas senators have supported the Republican proposal, contributing to ongoing partisan gridlock. Insurance agents and health policy experts report that many residents are confronting unaffordable premiums leading some to forgo coverage entirely, increasing reliance on less traditional health care options like health shares and direct primary care. This shift raises concerns about increasing numbers of uninsured individuals; the Congressional Budget Office projects a rise of 2.2 million uninsured next year due to the subsidy expiration. Open enrollment deadlines remain fixed, and individuals must act quickly to secure coverage starting in January 2026. Key implications for insurance professionals include navigating a tightening marketplace, advising clients on alternatives, and understanding state-specific enrollment and subsidy impacts in Texas. This scenario highlights the broader challenges of marketplace sustainability and subsidy dependency within the U.S. health insurance system.