The enhanced premium tax credits that have made ACA marketplace coverage affordable for millions of Americans since 2021 are set to expire on December 31, 2025. If you’re currently receiving subsidies, this could mean a dramatic increase in your monthly premiums starting in 2026. Here’s everything you need to know to prepare.
## Understanding the Enhanced Premium Tax Credit Expiration
What exactly is expiring?
Since 2021, enhanced premium tax credits have expanded eligibility and increased the amount of financial help available for ACA marketplace coverage. These enhancements were created by the American Rescue Plan and later extended through 2025 by the Inflation Reduction Act.
The key changes these credits made:
- Eliminated the “subsidy cliff” at 400% of the Federal Poverty Level (FPL)
- Made subsidies available to people earning above 400% FPL
- Capped premium costs at 8.5% of income for everyone, regardless of how high their income
- Increased subsidy amounts for people earning between 100-400% FPL
Unless Congress acts to extend these enhancements, starting January 1, 2026, the old rules return: subsidies will only be available to households earning between 100% and 400% of FPL, and those who still qualify will receive less assistance than they do now.
How Much Will ACA Premiums Increase in 2026?
The impact varies significantly based on your age, income, and location, but the numbers are sobering.
Average increases across all enrollees:
- The amount that marketplace enrollees pay out-of-pocket could more than double
- Average premiums for enrollees are expected to increase by over 75%
- Those earning above 400% FPL (about $62,600 for an individual or $128,600 for a family of four in 2025) could lose subsidies entirely
Real-world examples:
A 63-year-old couple in Charleston, West Virginia, earning $85,000 per year would pay more than 15 times as much for the lowest-cost Gold plan compared to 2025. Even in lower-cost states like Idaho, a similar couple would see their lowest-cost Bronze plan jump from less than $2 per month to $1,527 per month.
A family of four earning $130,000 (about 404% of FPL) would see their monthly premium jump from $921 to $1,998—an annual increase of about $12,900.
For a 60-year-old couple with an annual income at 402% of FPL (about $85,000), premiums could reach $22,600 per year in 2026.
Who Will Be Most Affected by ACA Premium Increases?
You’re at highest risk if you:
- Earn between 400% and 600% of FPL (roughly $62,600-$93,900 for an individual, or $128,600-$192,900 for a family of four)
- Are an early retiree between 55 and 64 years old
- Are self-employed or own a small business
- Live in a state with high insurance premiums
- Have income that fluctuates year-to-year
Currently, about 22.3 million people—90% of all ACA marketplace enrollees—benefit from the enhanced subsidies. If they expire, an estimated 4 to 4.8 million people could lose coverage entirely.
Will Congress Extend Enhanced ACA Subsidies?
As of early November 2025, Congress has not reached an agreement. The subsidies have become a central issue in an ongoing government shutdown, with Democrats insisting any funding bill must include an extension, while Republicans want to address the issue separately.
What we know:
- Public support for extending the subsidies remains high, with 74% of Americans in favor
- Some bipartisan proposals have been introduced, including a two-year extension with income caps between $200,000 and $400,000
- Senate Majority Leader John Thune has indicated any extension would need 60 votes
- Several proposals range from one-year extensions costing $23.4 billion to permanent extensions costing $350 billion over 10 years
The reality: Even if Congress acts, it may come too late for state marketplaces to update their systems smoothly, potentially causing confusion during open enrollment.
What You Should Do Right Now?
Step 1: Understand your current eligibility
Check where your household income falls relative to 400% of the Federal Poverty Level for 2025:
- Individual: $62,600
- Couple: $84,600
- Family of 3: $106,600
- Family of 4: $128,600
- Family of 5: $150,600
If you’re above these thresholds, you could lose all subsidy eligibility in 2026. If you’re below but close, your subsidies will be reduced.
Step 2: Shop during open enrollment
Open enrollment runs from November 1, 2025, through January 15, 2026, in most states (some states have extended deadlines). To have coverage start January 1, you must enroll by December 15.
Even though Congress could still act, you should shop and enroll assuming the subsidies will expire. Marketplace rates currently reflect this assumption.
Step 3: Explore income optimization strategies
If you’re close to the 400% FPL threshold, consider strategies to lower your Modified Adjusted Gross Income (MAGI) for 2026:
- Maximize retirement account contributions (401k, IRA, SEP-IRA)
- Increase Health Savings Account (HSA) contributions
- Time income and deductions strategically
- If self-employed, review your business expense deductions
Important: These strategies work best if you’re just over the threshold. Consult with a tax professional before making major financial decisions.
Step 4: Compare all available coverage options
Don’t limit yourself to marketplace plans. Depending on your situation, consider:
- Employer-sponsored coverage (yours or your spouse’s)
- Part-time employment with benefits
- Professional association or chamber of commerce group plans
- Short-term health insurance (not ACA-compliant but may be cheaper)
- Health sharing ministries (not insurance but an alternative some use)
Step 5: Adjust your budget
Even if you still qualify for subsidies, prepare for higher out-of-pocket costs. Review your 2026 financial plan and identify where you can accommodate increased health insurance expenses.
Options If You Earn Above 400% FPL
Losing all subsidy eligibility is the most dramatic change. Here’s what you can do:
Recalculate your household income: Remember, it’s Modified Adjusted Gross Income (MAGI) that matters, not your gross wages. MAGI includes wages, self-employment income, rental income, pensions, interest, dividends, and capital gains, but you can subtract certain deductions.
Consider a high-deductible health plan: If you’re relatively healthy, a Bronze or high-deductible plan may be more affordable than maintaining your current coverage level.
Look at spousal coverage options: If one spouse has access to employer coverage, it may be worth having one person take that plan while the other shops the marketplace—or having both switch to employer coverage.
Explore cost-sharing reduction (CSR) plans: If your income changes and drops below 250% FPL, Silver plans with CSR provide better value by lowering deductibles and copays.
When will we know for sure about the ACA Tax Credit extension?
Unfortunately, the timing remains uncertain. Congress could act as late as December 2025, or even retroactively in early 2026. State-based marketplaces have prepared contingency plans to update their systems if Congress extends the subsidies, but this could take days or weeks.
What this means for you: Don’t wait for Congress to act. Make your enrollment decisions based on the rates you see during open enrollment, which assume the subsidies expire.
How can I stay informed?
The situation is evolving rapidly. Here’s how to stay updated:
- Check Healthcare.gov regularly for official updates
- Monitor news about Congressional negotiations
- Sign up for updates from your state’s marketplace
- Work with a licensed insurance agent who can guide you through changes
The bottom line
The expiration of enhanced premium tax credits represents the biggest change to ACA marketplace affordability since the law was implemented. While Congress may still act, you can’t count on it.
Your action plan:
- Calculate your household income relative to 400% FPL
- Enroll during open enrollment (November 1 – January 15, deadline December 15 for January 1 start)
- Compare ALL coverage options—marketplace, employer, and alternatives
- Budget for higher premiums in 2026
- Explore legitimate income optimization strategies if you’re near the threshold
Don’t wait until the last minute. The combination of higher premiums, potential subsidy loss, and Congressional uncertainty makes this the most complex open enrollment period in years.
Need help navigating these changes? Contact Andrew Harris at Simple Start Insurance for a free consultation. Call or text 786-292-0180 to review your specific situation and find the most affordable coverage option for 2026.
