ACA Premiums Rise as Pandemic-Era Subsidies Set to Expire in 2026

Affordable Care Act (ACA) health insurance premiums are projected to increase significantly in 2026. These increases are influenced by policy changes from the previous administration and Congress, coupled with the scheduled expiration of enhanced tax subsidies introduced during the COVID-19 pandemic. The enhanced subsidies, which have helped many policyholders reduce their premiums, are set to revert to pre-pandemic levels by the end of December.

This reversion will also reimpose an income cap, excluding individuals earning more than 400% of the federal poverty level from receiving premium tax credits. This threshold translates to approximately $62,600 for single individuals and $84,600 for couples in 2023 values. Congressional decisions by year-end will determine if enhanced subsidies are extended, an issue with significant fiscal and political considerations, including a projected $335 billion cost over ten years for permanent extension and potential electoral impacts in the upcoming midterms. Early retirees and small-business owners represent a sizeable portion of the ACA market and are particularly affected by these changes because many small businesses do not provide group health insurance coverage. The potential subsidy reduction or elimination could lead to premium spikes exceeding $1,000 monthly for some policyholders near retirement. Analysis of specific cases demonstrates substantial premium hikes for individuals above the income cap, exemplified by a Portland couple projected to see premiums jump from $600 to $1,800 per month. The open enrollment period beginning November 1 will reveal finalized premiums and subsidy levels, enabling consumers to reassess coverage choices. Consumers enrolling must monitor income changes closely, as exceeding the income cap during the year can trigger repayment of subsidies.

This dynamic creates uncertainty for policyholders relying on ACA plans for financial protection and emphasizes the importance of legislative outcomes and careful financial planning in the near term. Critics and supporters debate the subsidy expansions’ fiscal impacts and enrollment effects, with some citing concerns over enrollment integrity and employer coverage shifts. Meanwhile, other ACA challenges such as deductible levels and network adequacy remain focal issues for medium to higher income enrollees. Overall, the expiration of enhanced subsidies marks a significant shift in ACA market economics, influencing affordability and coverage decisions for millions of Americans, particularly early retirees and small-business communities.