Posted For: Rotorblade
Health insurance premiums could surge by an average of 75% next year as expanded Affordable Care Act subsidies are set to expire at the end of December.
Congress did not extend the enhanced subsidies during negotiations surrounding the recent government shutdown, leaving millions of low- and middle-income Americans facing significant increases in healthcare costs in 2026.
Enhanced ACA subsidies — which have helped lower marketplace insurance costs for households across the country — are scheduled to end on December 31. And without a broader healthcare funding deal, renewal appears unlikely. With open enrollment already underway, many Americans may confront sharp premium hikes when choosing their 2026 plans.
Democrats have pushed to extend these subsidies, making the issue a central point of contention during the 43-day shutdown. Although lawmakers reached an agreement to reopen the government on November 12, they did not act on the subsidy extensions. The deal does, however, allow for renewed debate on the matter next month. Congress also declined to reverse President Donald Trump’s Medicaid policy changes, another priority for Democrats.
If no action is taken, consumers could face reduced access to affordable coverage and higher out-of-pocket expenses.
What to expect for ACA and Medicaid coverage in 2026
The expiration of the enhanced ACA subsidies will hit low- and middle-income households hardest.
The expanded tax credits, created in 2021, increased the amount of financial assistance available to marketplace enrollees. Since then, enrollment has grown from roughly 11 million to more than 24 million people — in part because middle-income Americans earning up to 400% of the federal poverty line (about $128,600 for a family of four) became eligible for relief. Without these subsidies, premiums for marketplace plans are projected to rise by more than 75% on average, according to a KFF analysis. Some enrollees would lose significant financial assistance, while others would no longer qualify at all, potentially seeing increases of over $1,000 per year.
Insurers are also expected to raise rates further to compensate for anticipated drops in enrollment among healthier individuals, who are more likely to leave the market when costs rise.
About 20 million people received enhanced ACA subsidies last year.
Medicaid recipients may also face rising costs. Congress did not roll back President Trump’s Medicaid changes enacted under the One Big Beautiful Bill Act. Under that law, new eligibility requirements mandate that non-exempt adults work at least 80 hours per month to qualify for Medicaid coverage. The bill also caps how much funding states can direct from provider taxes to Medicaid programs, reducing revenue for hospitals and leading to higher costs for some recipients.
Rural hospitals and low-income Americans are expected to feel the greatest impact. As of mid-2025, roughly 83 million people were enrolled in Medicaid and the Children’s Health Insurance Program.