Americans should prepare for the largest-ever increase in health insurance premiums under the Affordable Care Act (ACA) marketplace plans, potentially doubling or even tripling costs in 2026. This impending surge is linked to the expiration of enhanced premium tax credits that have been subsidizing healthcare premiums for over 24 million Americans.
These credits, originally introduced in 2021 and extended through the end of 2025, have significantly increased affordability and enrollment, but they face expiration due to ongoing political gridlock in Congress.
The federal government shutdown now in its ninth day is a major factor in this uncertainty. Talks between Democrats and Republicans have stalled, largely over disagreements about maintaining funding for these critical healthcare subsidies. The shutdown has left hundreds of thousands of workers unpaid and jeopardized federal loans and food assistance programs. Most pressing, however, is the looming expiration of ACA premium tax credits that many rely on for affordable coverage.
Currently, ACA tax credits cap how much enrollees pay for insurance premiums based on their income, with the federal government covering the rest. If Congress does not act, these enhanced tax credits will expire on January 1, 2026, causing many families to face a sharp loss in subsidies.
For example, an individual earning $28,000 pays roughly 1% of their income toward their premiums now—about $325 annually. Without the credits, that cost would jump to nearly 6% or $1,562 per year, a $1,238 increase. For a median-income family of four, losing these credits would mean an additional $3,735 in annual premiums, far outpacing expected wage, rent, or food cost increases.
States that have not expanded Medicaid, like Texas and Florida, will be hit hardest, along with vulnerable groups including rural populations and communities of color. California Governor Gavin Newsom warns that due to recent federal cuts passed in legislation dubbed the “Big Beautiful Bill,” many Californians will see their premiums nearly double, with some costs tripling if Congress does not restore funding. Premium hikes will disproportionately affect low-income residents, the self-employed, and older adults.
This year, ACA enrollment surged to a record 24 million, partly due to the Biden administration’s expansion of eligibility and subsidies, which improved affordability for many and reduced coverage disparities among racial and socioeconomic groups.
However, the expiration of the enhanced credits risks reversing these gains, leading to an estimated 4.8 million people losing coverage and millions more facing higher premiums. This would increase uncompensated care costs, hurting hospitals and providers financially and reducing access to care.
Federal workers are also not immune; they face double-digit premium increases next year as part of ongoing adjustments, adding more strain on family budgets already stretched thin by inflation and economic pressures.
There is bipartisan recognition among some politicians and insurance commissioners that failure to extend these tax credits is a non-partisan issue affecting millions nationwide. Yet with less than a month until open enrollment begins on November 1, millions of Americans purchasing marketplace insurance face uncertainty. Many insurance providers have delayed sharing 2026 premium rates, pending congressional action.
In summary, unless Congress extends these enhanced ACA premium tax credits, millions will confront the steepest health insurance premium increases in history next year. This risks increasing the uninsured population, burdening healthcare providers, and exacerbating health disparities. For families across the nation, the stakes could not be higher.
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