Why ACA health insurance premiums may see ‘sharp’ increase in 2026

Republicans gave a roughly $4 trillion tax cut to Americans in the so-called “big beautiful bill” that President Donald Trump signed into law July 4, extending several tax provisions scheduled to expire in 2026.

However, there was a notable omission, according to health policy experts: an extension of a tax break that lowered health insurance premiums for millions of people.

The enhanced premium tax credits, in place since 2021, have lowered the cost of health insurance premiums for those who buy coverage through the Affordable Care Act marketplace. Enrollees can use these to lower their premium costs upfront or claim the credits at tax time, but the credits are scheduled to expire after 2025.

More than 22 million people — about 92% of ACA enrollees — received a federal subsidy this year that reduced their insurance premiums, according to KFF, a nonpartisan health policy research group.

Those recipients would see a “sharp premium increase” on Jan. 1, Cynthia Cox, the group’s ACA program director, said during a webinar Wednesday.

The average marketplace enrollee saved $705 in 2024 — a 44% reduction in premium costs — because of the enhanced tax credits, according to a November analysis by the Center on Budget and Policy Priorities, a nonpartisan research and policy institute.

Without the credits, average out-of-pocket premiums in 2026 would rise by more than 75%, Larry Levitt, KFF’s executive vice president for health policy, said during the webinar.

Additionally, 4.2 million Americans would become uninsured over the next decade if the enhanced subsidies lapse, according to the nonpartisan Congressional Budget Office.

That growth in the ranks of the uninsured is in addition to the nearly 12 million people expected to lose health coverage from over $1 trillion in spending cuts Republicans made to health programs such as Medicaid and the ACA to help offset the legislation’s cost.

The spending reduction amounts to the largest rollback of federal health-care support in history, Levitt said.

“The scale of the change to the health-care system is staggering,” he said.

Premium tax credits were established by the ACA and were originally available for people making between 100% and 400% of the federal poverty level.

Enhanced credits became available after former President Joe Biden signed the American Rescue Plan, a pandemic-era stimulus package, in 2021.

The legislation temporarily increased the amount of the premium tax credit and expanded eligibility to households with an annual income of more than 400% of the federal poverty limit, which was $103,280 for a family of three in 2025, according to The Peterson Center on Healthcare, a nonprofit focused on health care policy, and KFF. The law also capped out-of-pocket premiums for certain plans at 8.5% of income, it said.

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Those policies were then extended through 2025 by the Inflation Reduction Act, which Biden signed in 2022.

The enhanced subsidies made insurance more affordable, serving to greatly increase the number of Americans with health insurance, experts said.

ACA enrollment has more than doubled, to roughly 24 million people in 2025 from about 11 million in 2020, according to data tracked by The Peterson Center on Healthcare and KFF.

The expiration of enhanced subsidies would affect all recipients of the premium tax credit, but would affect certain groups more than others, health experts said.

For example, the enhancements have been “especially critical” for increasing enrollment among Black and Latino individuals, and have also spurred enrollment among lower-income households, self-employed workers and small business owners, according to the Center on Budget and Policy Priorities.