Millions of Americans are preparing for a significant rise in health insurance premiums as enhanced subsidies are set to expire at the end of the year. This situation is causing widespread concern about the financial implications tied to the anticipated premium increases.
One couple from Austin, Texas, Ashley and her husband, are considering dropping their health coverage to only insure their two children due to the spiraling costs. Under the current Affordable Care Act (ACA) framework, their premiums are projected to surge from $1,200 per month to approximately $3,553 in 2026 without the enhanced federal subsidies—an expense that could eat up a third or more of their household income, amounting to nearly $43,000 annually. Thompson expressed her dread regarding the situation, stating, “Quite frankly, it’s terrifying.”
This predicament affects a significant portion of the population. Currently, about 22 million Americans benefit from the enhanced subsidies that help lower health insurance costs, constituting 92% of those enrolled in ACA marketplace plans. The expiration of these subsidies has become a focal point in the ongoing political struggle surrounding the federal government shutdown, which is currently the longest in U.S. history.
Democratic leaders are advocating for a one-year extension of the enhanced subsidies as part of negotiations to reopen the government. Conversely, Republicans are pushing for separate discussions on the subsidy issues. Notably, Senate Majority Leader Chuck Schumer has proposed including the subsidies in the broader negotiations, alongside plans to establish a bipartisan committee to tackle long-term health care affordability reforms.
A recent analysis indicated that over half of ACA marketplace enrollees reside in Republican districts. This year alone, 80% of all premium tax credits—totaling approximately $115 billion—were allocated to individuals in states that Trump won during the last election cycle. Political analysts have cited health care affordability as a critical issue influencing electoral outcomes, contributing to Democratic successes in recent elections.
Without the enhanced subsidies, the average recipient could see their annual premiums leap by 114%, rising from $888 in 2025 to about $1,904 in 2026. Experts predict that approximately 4 million individuals may lose their health insurance over the next decade if these subsidies are allowed to lapse. Initial losses may not be drastic, but it’s estimated that over a million Americans might drop their insurance in the coming year due to increased unaffordability. Others might choose lower-tier plans, which usually come with higher deductibles, ultimately leading to substantial out-of-pocket costs if they require medical services.
Amid this uncertainty, some individuals, like 62-year-old Beth Keenan from Pittsburgh, are grappling with the potential of higher premiums. Currently paying $589 per month after accounting for subsidies, Keenan’s estimated net premium could jump to $1,065—a steep increase that could affect her lifestyle choices, like travel. Although she believes she can manage the additional costs in the short term, she remains wary about future premium hikes.
Keenan highlighted a, often overlooked, point about the disparity in tax benefits. “You get tax credits for private airplanes,” she noted. “Why shouldn’t I get a tax break?”
The situation reveals a troubling “subsidy cliff,” where individuals earning just slightly above the threshold for premium assistance could see their premiums skyrocket. For instance, a couple earning $85,000 could face an average annual premium increase of nearly $23,000 in 2026 if the enhanced subsidies expire, according to estimates.
As the open enrollment period for ACA marketplace plans begins, many potential enrollees, like fitness instructor Matthew Espinoza from San Francisco, are acutely aware of the financial stakes. Espinoza’s costs hinge on whether his income stays below the threshold; reaching $65,000 would result in losing his premium assistance, leading to a significant jump in monthly payments that he could find challenging to shoulder.
The ongoing uncertainty about the availability of subsidies has made planning for the future even more daunting for many families. As they consider their options, some, including Thompson, are actively exploring alternatives that may not provide the same level of coverage but could mitigate the financial burden.
“People think it’s those who are undeserving that get subsidies,” she stated. “But it’s just neighbors, regular people.” The looming changes amplify worries about healthcare access and affordability during a pivotal time for many American households.
