Affordable Care Act Stimulus Subsidies: Expiration, Costs, and Revival

The Affordable Care Act’s enhanced subsidies expired on December 31, 2025, after Congress did not extend them, and the effects on marketplace enrollees have been immediate: average monthly premium payments jumped 58%, sign-ups for 2026 coverage fell by more than a million, and roughly 9% of people who held marketplace coverage in 2025 have dropped it entirely.¹²

What the Enhanced Subsidies Did

The American Rescue Plan Act, signed in March 2021, temporarily rewrote how marketplace premium tax credits worked, and the Inflation Reduction Act extended those rules through the end of 2025.³ Two changes mattered most for consumers.

First, no one paid more than 8.5% of household income toward a benchmark silver plan, regardless of income. Before 2021, anyone earning above 400% of the federal poverty level was cut off from any premium help at all, a threshold widely known as the “subsidy cliff.”⁴⁵

Second, the credits were made more generous at every income level. People below 150% of poverty could enroll in a benchmark plan for zero premium, and those in the middle saw sharply reduced required contributions.⁵

In practical terms, by 2024 enrollees receiving premium tax credits paid an average of $888 a year in premiums with the enhanced credits, versus a projected $1,593 without them — a difference of about $705, or 44%. A 45-year-old earning $25,000 paid $160 a year with the enhanced credits and would have owed $1,077 without. Enrollees above 400% of poverty in HealthCare.gov states saved an average of $4,248 annually.³

Why the Subsidies Expired

The enhanced credits were set to sunset on December 31, 2025, and Congress did not renew them. The One Big Beautiful Bill Act, signed on July 4, 2025, did not include an extension.⁶ A government funding bill passed during a 44-day shutdown — the longest in U.S. history — also left them out.⁷

The House passed a three-year extension in early January 2026, but Senate Republicans blocked it, and President Trump threatened to veto the measure. Senate Democrats introduced the Lower Health Care Costs Act as an alternative vehicle for a three-year extension; that was blocked as well.⁷ The Congressional Budget Office had estimated a permanent extension would cost about $335 billion over the 2025–2034 decade.³

The One Big Beautiful Bill Act also tightened marketplace rules beginning in 2026. It removed the repayment caps that had shielded lower-income enrollees who underestimated their income at tax time, ended the continuous special enrollment period for people below 150% of poverty, and narrowed which immigrants can qualify for premium tax credits. Under the new rules, refugees, asylees, and people with Temporary Protected Status are no longer eligible; eligibility is limited to green-card holders, Cuban or Haitian entrants, and citizens of certain Pacific Island nations.⁸

What Premiums and Deductibles Look Like Now

Marketplace benchmark premiums rose an average of 21.7% for 2026, compared with 2.0% average annual growth from 2020 through 2025. The subsidy expiration accounts for an estimated four to six percentage points of that increase; the rest reflects underlying medical cost trends, insurer uncertainty, and regulatory changes including tariff effects and a CMS “Marketplace Integrity” rule.⁹ At least 21 states lost one or more participating insurers for 2026, and Aetna exited every marketplace region where it had operated.¹⁰

What that looks like on the ground: the average monthly premium payment after tax credits climbed from $113 in 2025 to $178 in 2026, a 58% jump. Average deductibles hit a record $3,786, up 37% from the year before.¹

Enrollees who kept coverage shifted toward cheaper, less generous plans. The share choosing bronze plans (lower premiums, higher deductibles) rose from 30% to 40%. Silver enrollment fell to a record low of 43%, and only 37% of consumers selected cost-sharing reduction plans, also a record low.¹

Who Is Being Hit Hardest

The pain is not evenly distributed. Two groups accounted for most of the drop in 2026 sign-ups.

Consumers with incomes between 400% and 500% of the federal poverty level — the group the enhanced credits had newly made eligible — made up 27% of the total decline in sign-ups while representing just 3% of 2025 enrollees. Enrollment in that band fell 44%. Young adults ages 18 to 34 accounted for 46% of the decline, losing 542,000 sign-ups.¹

Geography matters too. The ten states that never expanded Medicaid rely more heavily on marketplace subsidies to cover low- and moderate-income residents. Florida, Alabama, Mississippi, and Texas all had more than 95% of marketplace enrollees receiving tax credits, compared with a national average of 92%.¹¹ Sign-ups for 2026 dropped by more than 20% in South Carolina, and by 15% to 20% in Ohio, Indiana, West Virginia, Oklahoma, Oregon, and Arizona. New Mexico went the other direction, posting an 18% enrollment gain after the state allocated $40 million to offset the lost federal subsidies.¹²

Overall, average monthly effectuated enrollment for 2026 is projected to fall to about 17.5 million, down from 22.3 million in 2025.¹² The Congressional Budget Office projects that the expiration combined with other provisions of the One Big Beautiful Bill Act will increase the number of uninsured Americans by more than 14 million by 2034, with about 2.1 million of that attributed to marketplace changes and 7.5 million to Medicaid provisions including new work requirements.¹³

How Enrollees Are Coping

A KFF poll of more than 1,100 adults who had marketplace coverage in 2025, conducted in February and March 2026, found that 9% had dropped coverage. Another 17% of returning enrollees said they were not confident they could afford premiums for the full year.²

Among people who kept their plans, the poll found that:

55% reported cutting or planning to cut spending on necessities such as food and clothing to afford healthcare.
43% were seeking extra work.
23% were skipping or delaying other bills.
21% were taking on debt.²

Final effectuated enrollment data for 2026 is not yet available. The first official snapshot covering February 2026 coverage is expected in July 2026, and full-year figures will not be published until mid-2027.¹⁴

Could the Enhanced Subsidies Come Back

Legislative efforts to restore the credits are ongoing but so far unsuccessful. If Congress does pass an extension, at least some marketplaces are prepared to apply the savings automatically. Covered California, for example, has stated that if the federal government restores the enhanced credits, the savings will be applied automatically to enrollees’ plans.¹⁵

One boundary worth flagging: the expiration affects premium tax credits, not cost-sharing reductions (CSRs), which are a separate ACA subsidy that lowers deductibles and copays for silver-plan enrollees between 100% and 250% of poverty. The stimulus laws did not change CSR eligibility or benefit levels.¹⁶ But because many consumers are now moving from silver plans to bronze plans to escape higher premiums, they are giving up CSR access in the process.

1
KFF. What We Know So Far About 2026 ACA Marketplace Enrollment, Premiums, and Deductibles
2
CNBC. ACA Enrollees Uninsured
3
KFF. Inflation Reduction Act Health Insurance Subsidies: What Is Their Impact and What Would Happen if They Expire
4
KFF. How the American Rescue Plan Act Affects Subsidies for Marketplace Shoppers and People Who Are Uninsured
5
CMS. American Rescue Plan and the Marketplace
6
ASTHO. One Big Beautiful Bill Law Summary
7
Office of Senator Martin Heinrich. Senator Heinrich Statement on Senate Republicans Blocking ACA Tax Credit Extension
8
AMA. 4 Big Beautiful Bill Changes Will Reshape Care in 2026
9
Commonwealth Fund. Putting the Extraordinary Increase in ACA Premiums in 2026 in Perspective
10
Urban Institute. Understanding the Extraordinary Increase in ACA Premiums in 2026
11
American Cancer Society Cancer Action Network. ACA Enhanced Tax Credits Fact Sheet
12
Forbes. ACA Subsidy Expiration Enrollment Drop
13
KFF. How Will the 2025 Reconciliation Law Affect the Uninsured Rate in Each State
14
KFF. ACA Marketplace Enrollment Is Down in 2026, but All of the Data Isn’t in Yet
15
Covered California. Important Changes
16
KFF. Explaining Health Care Reform: Questions About Health Insurance Subsidies