Approximately 22 million Americans who purchase health insurance through the Affordable Care Act (ACA) marketplaces are facing a significant increase in their monthly premiums. Enhanced federal subsidies, which have lowered costs since 2021, are scheduled to expire at the end of the year, potentially doubling the average cost of coverage for millions of households.
Key Takeaways
- An estimated 22 million people are set to lose enhanced premium tax credits for their ACA health plans.
- Without the subsidies, the average monthly premium for marketplace plans is projected to more than double.
- The expiration primarily affects lower and middle-income individuals, particularly the self-employed and small business employees.
- Analysis from the Urban Institute suggests that 4.8 million people could become uninsured as a direct result.
- A significant number of beneficiaries reside in states that did not expand Medicaid, making them more reliant on ACA marketplaces.
Who Relies on These Health Insurance Subsidies?
The enhanced premium tax credits support a diverse group of Americans who do not receive health insurance through an employer. These individuals and families purchase their coverage directly from the health insurance marketplaces established by the Affordable Care Act.
According to demographic data, the typical person with an ACA plan is an adult in their mid-40s. Their income generally falls between 100% and 200% of the federal poverty line, which for a two-person household in 2025 was approximately $21,000 to $42,000 annually.
Small Business Workers and the Self-Employed
A substantial portion of those benefiting from the subsidies are connected to the small business economy. An analysis from KFF, a health policy research organization, found that nearly half of all adults with marketplace plans are self-employed, small-business owners, or employees of small businesses.
Unlike larger corporations, companies with 25 or fewer employees are often unable to offer group health insurance plans, leaving their workers to seek coverage independently. "The Affordable Care Act is specifically designed to fill that gap," explained Jessica Banthin, a senior fellow at the Urban Institute.
Employment Profile of ACA Enrollees
Based on a 2025 survey, adults with privately purchased insurance include:
- 27.4% Employed by a small business (fewer than 25 employees)
- 18.0% Self-employed or a business owner
- 27.4% Other workers
- 8.5% Retired
- 6.4% Students
Certain professions have a high concentration of individuals who rely on marketplace subsidies. Data shows that at least a quarter of all chiropractors, musicians, real estate brokers, farmers, dentists, and manicurists currently benefit from the tax credits.
The Geographic and Political Landscape
The debate over extending the enhanced credits has political dimensions, as the majority of beneficiaries live in states that supported Donald Trump in the 2024 presidential election. Approximately 80 percent of the 22 million people affected reside in these states.
The impact is most pronounced in states that chose not to expand their Medicaid programs under the ACA. In these 10 states, lower-income residents who don't qualify for Medicaid have few options for affordable coverage outside the ACA marketplace.
Medicaid Expansion and Marketplace Enrollment
States that did not expand Medicaid have a larger population of low-income individuals who must rely on the ACA marketplace for health insurance. The introduction of enhanced subsidies in 2021 made these plans significantly more affordable, with many plans costing $0 per month for those earning below 200% of the poverty level. This led to a near doubling of marketplace enrollment, especially in non-expansion states.
Florida has one of the highest concentrations of beneficiaries, with 24% of its under-65 population receiving the tax credit. Similarly, 14% of Georgians in the same age group benefit from the subsidies. The widespread use in these areas highlights the critical role the credits play in regional healthcare access.
How Much Will Insurance Costs Increase?
If the enhanced credits expire, subsidies will revert to the less generous levels available from 2014 to 2020. For most, this means a sharp rise in monthly payments. KFF estimates that the average premium will more than double nationwide, but the specific impact varies significantly by income.
Impact on Lower-Income Households
Individuals and families with incomes near the federal poverty line will experience the most immediate shock. Currently, many in this group pay $0 per month for a mid-tier (silver-level) plan. Without the enhanced credits, their premium contribution would jump to 4% of their income.
"The cost of health insurance is never going to be low enough for a person who makes just above poverty to be able to afford it. If you want that person to have health insurance, then there needs to be financial assistance."
For example, a 50-year-old couple in Dallas earning 150% of the federal poverty level ($32,000 in 2025) would see their annual premiums for a silver plan rise from $0 to approximately $1,300 in 2026.
Middle-Income Families Face Steeper Bills
Those with slightly higher incomes will also see a substantial increase. A family making 250% of the federal poverty level ($53,000 for a couple) would see their premium share increase from about 4% of their income to 8%.
The most severe change affects those earning more than 400% of the poverty level (about $84,000 for a family of two). This group, numbering over one million people, will lose their subsidy entirely. They will become responsible for the full premium, which is also projected to rise by an average of 18% in 2026 due to inflation in healthcare costs.
Consequences of Subsidy Expiration
The end of the enhanced tax credits is expected to have far-reaching consequences for both individuals and the stability of the ACA marketplaces. The Urban Institute projects that of those who lose subsidies, 4.8 million will become uninsured.
Others may seek coverage through different means, such as finding a job with a larger employer that offers health benefits or joining a spouse's plan. This could disrupt the employment landscape for small businesses that rely on the marketplace to provide an affordable healthcare option for their workers.
The marketplaces themselves are also at risk. "The marketplaces themselves are going to become smaller," noted Banthin. "In some states, they’ll be half the size. And so the people who stay enrolled are going to have fewer choices." A smaller, less healthy insurance pool could lead to even higher premiums in the future.
Many enrollees may be unaware of the pending price hike. A recent poll found that more than half of marketplace customers had heard little or nothing about the expiring credits. According to Cynthia Cox of KFF, this is because the subsidy is applied automatically as a discount.
"People are really just focused on how much do they have to pay each month," Cox said. "They’re really not looking at how much they would have had to pay without the enhanced rate." This lack of awareness could lead to widespread surprise and financial strain when open enrollment for 2026 plans begins.
