Impact of ACA Subsidy Expiration on Coverage Options and Enrollment

Ross and Rebecca Tobiassen, the owners of a small auto shop in western North Carolina, have opted to discontinue their Affordable Care Act (ACA) insurance. This decision comes after a significant increase in their monthly premium costs, which rose from $130 to over $550. Initially, government subsidies helped mitigate their expenses, but following the expiration of enhanced tax credits at the end of 2025, they found the premiums unsustainable.

The end of these subsidies, established under the American Rescue Plan Act, has broader implications. According to Wakely Consulting Group, ACA enrollment is expected to drop from over 22 million to 16.5 million by 2026. North Carolina experienced a 22% decrease in ACA sign-ups for 2026, the most substantial drop among all states.

Katie Alexander from Pisgah Legal Services noted that nearly 100 clients chose to drop coverage this year. Others transitioned to more affordable plans with reduced coverage. Among those affected are gig workers and part-time employees who lack access to employer-sponsored plans or Medicaid.

Healthcare policy experts, including Risha Gidwani and Cheryl Damberg, emphasize that without subsidies, even the most economical ACA plans, such as bronze plans, become financially burdensome. This situation can lead to a "death spiral," where higher premiums result as healthier individuals leave the risk pool.

The Tobiassens, despite recognizing the risk of going uninsured, have opted to manage potential medical expenses through savings. They considered faith-based healthcare organizations but ultimately decided against it. Their decision underscores ongoing challenges within the health insurance landscape, especially as subsidies fluctuate and market dynamics shift.