Unless Congress acts, the Affordable Care Act’s enhanced premium subsidies will expire at the end of the year. Consumers, insurers, and state health exchanges are bracing for higher out-of-pocket health care costs in 2026.
Health policy analysts warn that the impact could be immediate and substantial.
The Kaiser Family Foundation estimates that, absent an extension, ACA Marketplace premium payments would more than double on average next year, with especially sharp increases for many middle-income enrollees who would lose eligibility entirely under pre-pandemic rules.
A December KFF survey found that 54% of Marketplace enrollees who are registered to vote said a $1,000 increase in total health costs would have a “major impact” on whether they vote in the 2026 midterms, underscoring the political stakes.
Congress remains split on what to do. Democrats are pressing to extend the enhanced subsidies largely as-is. Republicans are divided—some citing the federal cost and long-standing opposition to “Obamacare,” others warning that premium spikes could backfire politically.
The Senate recently rejected competing proposals that included a straightforward extension and a Republican alternative emphasizing health savings accounts, with neither reaching the 60-vote threshold.
Meanwhile, marketplaces are trying to manage uncertainty during open enrollment. CMS reported about 949,450 new sign-ups and roughly 4.8 million returning customers selecting plans early in the 2026 enrollment period, as officials and state exchanges prepare contingency plans that could take days or weeks to implement if Congress changes the rules.
Enhanced ACA subsidies have become a major economic force in the U.S. health system. It has expanded coverage for millions and reduced household financial strain.
Supporters say the subsidies have made marketplace plans far more affordable, boosting enrollment and keeping many families from slipping into poverty. Analysts also point to research linking subsidy-driven coverage to lower out-of-pocket spending, fewer catastrophic medical bills, reduced bankruptcies, and other signs of improved financial stability.
The benefits are often described as especially significant for working-class households and communities of color, which face higher rates of uninsured coverage and medical debt.
At the state level, the subsidies act like an economic stimulus by putting money back into residents’ budgets, which can ripple through local economies. Projections suggest some states—such as Texas and Florida—could see measurable losses in economic activity and jobs if enhanced assistance expires.
Guest:
Elizabeth Pancotti is Managing Director of Policy and Advocacy at Groundwork Collaborative
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This episode will be recorded on Thursday, December 18, 2025, at 12:30 p.m.
