ACA Subsidies Are Expiring: How Much More You'll Pay for Health Insurance
The ACA's enhanced premium tax credits expired January 1, 2026. Average marketplace premium payments rose 114% — from $888 to $1,904 a year, per KFF — and shoppers above 400% of the federal poverty line lost subsidy eligibility entirely. Below, the exact dollar impact by income level and how to rebuild your budget around it.
How much did ACA premiums actually increase in 2026?
The enhanced premium tax credits introduced by the 2021 American Rescue Plan, and extended through 2025 by the Inflation Reduction Act, expired at the end of 2025 without a congressional extension. KFF estimates that the average subsidized ACA marketplace enrollee's annual premium payment rose 114% — from $888 in 2025 to $1,904 in 2026, an increase of about $1,016.
That increase compounds with ordinary rate growth: insurers separately proposed a median 18% increase to their underlying 2026 premiums, before subsidies are even factored in. Actual enrollment data bears this out — the average monthly premium payment among people who signed up for January 2026 coverage rose 58%, from $113 to $178, according to the Peterson-KFF Health System Tracker.
| Household example | 2025 annual payment | 2026 annual payment | Change |
|---|---|---|---|
| National average, subsidized enrollee | $888 | $1,904 | +$1,016 (+114%) |
| 45-year-old earning $20,000 (128% FPL) | $0 | $420 | +$420 |
| Individual earning $28,000 | $325 | $1,562 | +$1,238 (+381%) |
Source: KFF, “ACA Marketplace Premium Payments Would More than Double on Average Next Year if Enhanced Premium Tax Credits Expire.” FPL = federal poverty level.
What is the 400% FPL subsidy cliff — and why is it back?
Before 2021, ACA premium tax credits cut off entirely once household income crossed 400% of the federal poverty level — roughly $60,000 for an individual or $125,000 for a family of four. A household one dollar over that line paid full price, which could mean thousands more per year than a household one dollar under it. The enhanced credits eliminated this cliff from 2021 through 2025 by capping every enrollee's premium contribution at 8.5% of income, regardless of how high their earnings were.
That cap expired with the rest of the enhancement on December 31, 2025. For 2026 coverage, households above 400% FPL are no longer eligible for any premium tax credit — they now pay the insurer's full, unsubsidized rate, the same way ACA marketplace shoppers did before 2021.
How much more will you pay at your income level?
The dollar impact scales sharply with income and age. A 60-year-old couple earning $85,000 — just above the 402% FPL cliff — faces roughly $22,600 more per year in 2026, because their premium contribution jumps from about 8.5% of income to close to 25% of income once the subsidy disappears entirely. Lower-income households, who remain eligible for the non-enhanced credit, see smaller but still meaningful increases: the $20,000 earner above went from paying nothing to owing $420 a year, simply because the enhancement no longer zeroes out their contribution near the poverty line.
See the paycheck-level impact
Run your gross pay through our Salary Calculator to see exactly how much take-home pay you have left each month after taxes — before you decide how a higher premium payment fits into it.
Why did ACA marketplace enrollment drop by millions?
Higher premium payments changed enrollment behavior immediately. Marketplace plan sign-ups for 2026 fell to about 23.1 million — the sharpest single-year drop since the ACA exchanges launched — and KFF projects effectuated enrollment (people who actually pay their first premium and keep coverage active) will settle around 17.5 million in 2026, down from 22.3 million in 2025. The Congressional Budget Office separately projects the number of uninsured Americans will grow by 2.2 million in 2026 alone as a direct result of the lapsed enhancement.
| Metric | 2025 | 2026 |
|---|---|---|
| Effectuated enrollment | 22.3 million | ~17.5 million |
| Avg. monthly premium payment | $113 | $178 |
| Avg. annual deductible | ~$2,759 | $3,786 |
| Share on Silver plans | 57% | 43% (record low) |
| Share on Bronze plans | 30% | 40% |
Source: Peterson-KFF Health System Tracker, “What We Know So Far About 2026 ACA Marketplace Enrollment, Premiums, and Deductibles” (May 19, 2026 analysis).
The drop wasn't evenly distributed. Households between 400% and 500% FPL — who lost their subsidy entirely under the cliff — made up just 3% of 2025 sign-ups but accounted for 27% of the total coverage decline, with sign-ups in that group falling 44%. Adults aged 18 to 34 made up 46% of the overall drop, and enrollees who stayed shifted from Silver to Bronze plans in large numbers to keep premiums manageable, pushing average deductibles up 37% to $3,786 — the steepest one-year deductible increase on record.
Will Congress extend the ACA subsidies?
It remains unresolved. A bloc of House Republicans broke with their own party's leadership to force a floor vote on a three-year extension of the enhanced credits, but the Senate had already rejected a comparable proposal, and no extension had been signed into law as of mid-2026. Even if Congress acts later this year, any new subsidy would most plausibly apply to the 2027 plan year rather than retroactively reducing what enrollees are paying right now.
How do you rebuild your budget around higher premiums?
Three moves matter most this year. First, confirm your actual 2026 income estimate with your marketplace account — premium tax credits are trued up against real income at tax time, so an outdated estimate can mean an unpleasant surprise or a refund you're leaving on the table. Second, compare plan metal tiers during any special enrollment window; moving from a Silver to a Bronze plan lowers the monthly premium but raises the deductible, so run both numbers against your actual healthcare usage rather than the premium alone. Third, treat the new premium as a fixed monthly bill and rebuild your budget around it before it becomes a source of debt.
- Recheck your income estimate with the marketplace as soon as it changes — over- or under-estimating drives the size of your tax-time reconciliation.
- Compare metal tiers on total cost, not just premium: a lower Bronze premium can still cost more in a bad health year once the higher deductible is included.
- Rebuild your monthly budget around the new premium line item before it competes with rent, groceries, or debt payments.
Put the new premium into your monthly budget
Our Paycheck Budget Planner uses actual tax bracket math to show your real take-home pay per paycheck, so you can see exactly where a higher health insurance premium fits before it becomes a shortfall — no subscription required.
Frequently asked questions about the ACA subsidy expiration
Why did my ACA health insurance premium go up so much in 2026?
The enhanced premium tax credits created by the American Rescue Plan and extended by the Inflation Reduction Act expired on December 31, 2025. Without that extra federal subsidy, most ACA marketplace enrollees pay a larger share of their premium out of pocket, and anyone above 400% of the federal poverty level lost subsidy eligibility entirely. KFF estimates the average subsidized enrollee's payment rose 114%, from $888 to $1,904 a year.
What is the ACA subsidy cliff at 400% of the federal poverty level?
Before 2021, ACA premium tax credits cut off completely once household income passed 400% of the federal poverty level — roughly $60,000 for an individual or $125,000 for a family of four — so a single extra dollar of income could cost thousands in lost subsidies. The enhanced credits removed that cliff from 2021 through 2025 by capping premiums at 8.5% of income no matter how high earnings were. With expiration, the cliff is back: households above 400% FPL now pay the full, unsubsidized premium.
How much more will I pay for ACA marketplace insurance now that the subsidies expired?
It depends heavily on income. A 45-year-old earning $20,000 (128% FPL) who previously paid $0 now owes about $420 a year. An individual earning $28,000 saw their payment jump from $325 to $1,562 — a 381% increase. A 60-year-old couple earning $85,000, just above the 400% FPL cliff, faces roughly $22,600 more per year because they lost their subsidy entirely.
Will Congress bring back the enhanced ACA premium tax credits?
It's unresolved. A group of House Republicans broke with their party to force a vote on a three-year extension, but the Senate has already rejected a similar proposal, and no deal had passed as of mid-2026. Any future extension would likely apply to a later plan year rather than retroactively lowering 2026 premiums.
Are ACA subsidies gone completely, or just reduced?
They're reduced, not eliminated, for most enrollees. The original, non-enhanced ACA premium tax credits, which cap premiums at a percentage of income for households between 100% and 400% of the federal poverty level, are still in place. Only the extra enhancement layered on top since 2021, and eligibility for households above 400% FPL, went away.
Why did ACA marketplace enrollment drop in 2026?
Marketplace plan sign-ups fell to about 23.1 million for 2026 — the sharpest single-year drop since the ACA exchanges launched — as higher premium payments pushed people to shop less or drop coverage. Households between 400% and 500% FPL, who lost subsidy eligibility entirely, accounted for 27% of the decline despite being just 3% of 2025 enrollees, and adults aged 18-34 made up 46% of the drop.
How can I lower my health insurance costs now that subsidies are reduced?
Compare plan tiers during open enrollment — many enrollees are shifting from Silver to Bronze plans to keep premiums manageable, though that raises deductibles. Re-check your estimated income for the year, since ACA subsidies are based on projected household income and accurate reporting changes what you owe. Rebuilding your monthly budget around the new premium amount, using a tool like our Salary Calculator to see the net paycheck impact, can help you avoid a surprise shortfall.
Data sources: KFF: ACA Marketplace Premium Payments Would More than Double (income-level examples, 400% FPL cliff). Peterson-KFF Health System Tracker (2026 enrollment, premium, and deductible data). Congressional Research Service via Congress.gov, “Enhanced Premium Tax Credit and 2026 Exchange Premiums” (CBO uninsured and premium growth estimates). All paycheck and take-home pay figures independently verified against our Salary Calculator. Analysis by the staff at accurate.software.