The Door Is Closing on ‘Enhanced’ Affordable Care Act Subsidies

As we approach the end of 2025, not only will we bid farewell to the year, but we will also see the conclusion of the enhanced subsidies that have made health insurance more accessible for millions of Americans through the Affordable Care Act marketplace. The clock striking midnight on Dec. 31 will mark the end of these subsidies, unless a last-minute miracle occurs.

These “enhanced premium tax credits,” introduced during the pandemic in 2021 and extended in 2022, have played a crucial role in doubling ACA enrollment to over 24 million Americans in 2025. Presently, 93% of enrollees benefit from subsidies that help cover all or part of their premiums, according to the Centers for Medicare & Medicaid Services.

Despite efforts by four House Republicans to push for a vote on extending the subsidies, the vote is not expected until January, after the enhanced credits expire. Even if approved by the House, the chances of success in the Senate are slim.

The premium tax credit, also known as subsidies, assists in covering the cost of marketplace health insurance plans, making them more affordable for individuals. Since 2021, enhanced premium tax credits have been more substantial and widely available within the marketplace.

These enhanced subsidies have:

• Increased the amount of ACA tax credits.

• Removed the income cap to make more families eligible.

• Capped out-of-pocket premiums.

In 2024, enhanced premium tax credits reduced subsidized premiums by an average of $705 per year, according to KFF, a health policy nonprofit.

The enhanced credits are set to expire on Dec. 31, 2025. Subsequently, smaller, un-enhanced tax credits will be reinstated starting in 2026.

The Congressional Budget Office projected in September that extending the enhanced premium tax credits would amount to $350 billion over a decade, while increasing the insured population by 3.8 million by 2035 compared to current levels.

Following the expiration of enhanced subsidies, insurance prices through the ACA marketplace are expected to more than double in the upcoming year, primarily due to the end of the enhanced subsidies, as well as rising healthcare inflation.

Consequently: Analysts from both the CBO and KFF predict that millions of Americans will either lose their health insurance or opt not to renew it.

The CBO estimates that the termination of enhanced subsidies will lead to an additional 4.2 million uninsured individuals. Furthermore, other alterations to the ACA, some of which are pending in court, could result in millions more losing their insurance coverage. Overall, the CBO’s June analysis suggests that changes to the ACA marketplace could leave 8.2 million people without insurance.

This shift is compounded by changes to Medicaid, potentially leaving 14.2 million more Americans uninsured by 2034, according to KFF.

For those who maintain their coverage: Premiums are on the rise — often increasing by hundreds of dollars per month. In certain regions, the hikes have been even more significant. On average, policies obtained through ACA marketplaces have seen a 26% increase for 2026, according to KFF.

These price hikes are not solely due to inflation. With the conclusion of enhanced subsidies, many policyholders could see their premiums effectively double. KFF estimates that out-of-pocket premiums for subsidized individuals will surge by an average of 114% from 2025 to 2026.

While the full impact remains uncertain, experts in health policy anticipate that many current enrollees may need to opt for higher-deductible plans to accommodate the increased costs.

If you find your premiums increasing, it’s advisable to explore your alternatives and compare different plans. Prices and coverage of plans can change annually, offering the possibility of discovering a better deal by switching metal levels, providers, or plans.

If you remain eligible for subsidies, sticking with Silver plans is likely the best choice. Silver plans often have lower premiums and out-of-pocket expenses for qualifying individuals.

If you no longer qualify for subsidies, exploring other metal levels on the health insurance marketplace could be beneficial. Bronze plans may offer lower premiums, but higher out-of-pocket costs compared to Silver plans. In some cases, Gold plans might even be more cost-effective than Silver plans for unsubsidized individuals.

Please Note: The ACA open enrollment for January 2026 concluded on Dec. 15. Enrollments for February 2026 are still open.

The expiration of these subsidies has been a major point of contention between the two factions of Congress throughout the year and was a key factor in the recent government shutdown.

The 43-day shutdown concluded only when a group of Democrats joined GOP Senators in signing a set of budget bills to end the shutdown. In return, they secured a commitment to bring the extension of the enhanced ACA credits to a vote.

Although the promised vote took place, the proposal failed to garner the 60 Senate votes required, as did an alternative GOP healthcare plan.

While there have been bipartisan discussions about extending the subsidies, no viable bill has emerged that can pass both houses of Congress before the credits expire.