As open enrollment for 2026 coverage on the Affordable Care Act exchanges gets underway, millions of consumers are discovering how expensive their health insurance will become without the enhanced premium subsidies that have been in place since 2021.
Scheduled to lapse at the end of the year, these subsidies have provided many lower-income Americans with free or low-cost coverage while also extending eligibility to middle-class households. Without a renewal from Congress, lower-income, older, and middle-class enrollees will be hit hardest by soaring premiums. According to KFF, a nonpartisan health policy research group, the combination of expiring subsidies and insurer rate hikes will cause average monthly payments to more than double.
The enhanced tax credits, first enacted during the Covid-19 pandemic in 2021 and renewed the following year, proved highly popular, helping a record 24 million people sign up for coverage in 2025. More than 90% of enrollees receive premium assistance, which eliminates or nearly eliminates monthly costs for about half of all policyholders. If the subsidies expire, the Congressional Budget Office projects an additional 4 million people will be uninsured by 2034.
Much of the enrollment growth has occurred in Southern states that have not expanded Medicaid, where the enhanced subsidies allowed residents just above the poverty line to obtain affordable coverage. KFF data shows that about half of the enrollment increase since the policy began came from Texas, Florida, Georgia, and North Carolina. A majority of current enrollees reside in states won by President Donald Trump in 2024 or in congressional districts represented by a Republican.
The issue of extending the subsidies is now a central sticking point in federal spending talks and a key reason for the ongoing government shutdown, which began on October 1 and recently broke the previous record of 35 days. Democrats insist that any funding package must include a renewal of the assistance, while Republicans refuse to negotiate until the government reopens.
While a KFF survey in late September showed broad, bipartisan support for extending the subsidies, backing among Republicans and Make America Great Again supporters has reportedly declined as the shutdown has continued.
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