Enhanced tax credits that have helped reduce the cost of health insurance for the vast majority of Affordable Care Act (ACA, also known as "Obamacare") enrollees expired overnight, cementing higher health costs for millions of people in the United States at the start of the new year.
The change affects a diverse cross-section of the population who don’t get their health insurance from an employer and don’t qualify for Medicaid or Medicare – a group that includes many self-employed workers, small business owners, farmers and ranchers.
On average, the more than 20 million subsidised enrollees in the Affordable Care Act programme are seeing their premium costs rise by 114 percent in 2026, according to an analysis by the healthcare research nonprofit KFF.
The subsidies were first given to Affordable Care Act enrollees in 2021 as a temporary measure to help US residents get through the Covid-19 pandemic. Democrats in power at the time then extended them, pushing the expiration date to the start of 2026. Some lower-income enrollees received health care with no premiums, and high earners paid no more than 8.5 percent of their income. Eligibility for middle-class earners was also expanded.
Democrats forced a 43-day government shutdown over the issue, demanding the health subsidies be extended before they agreed to a new Republican budget. Some Republicans also called for a bipartisan solution to save their 2026 political aspirations, given the ACA's popularity – two-thirds of Americans favour the system, according to KFF.
But while congressional Republicans acknowledged the issue needed to be addressed, they refused to put it to a vote until late in the year. A House vote expected in January could offer another chance, but success is far from guaranteed.
Health analysts have predicted the expiration of the subsidies will drive many of the 24 million total Affordable Care Act enrollees – especially younger and healthier Americans – to forgo health insurance coverage altogether.
Over time, that could make the programme more expensive for the older, sicker population that remains.
Rising costs across the board
The surging healthcare prices come alongside an overall increase in health costs in the US, which are further driving up out-of-pocket costs in many plans.
It also comes at the start of a high-stakes midterm election year, with affordability – including the cost of health care – topping the list of voters’ concerns.
“It really bothers me that the middle class has moved from a squeeze to a full suffocation, and they continue to just pile on and leave it up to us,” said 37-year-old single mom Katelin Provost, whose healthcare costs are set to jump. “I’m incredibly disappointed that there hasn’t been more action.”
Some enrollees, like Salt Lake City freelance filmmaker and adjunct professor Stan Clawson, have absorbed the extra expense. Clawson said he was paying just under $350 a month for his premiums last year, a number that will jump to nearly $500 a month this year. It’s a strain for the 49-year-old, but one he’s willing to take on because he needs health insurance as someone who lives with paralysis from a spinal cord injury.
Others, like Provost, are dealing with steeper hikes. The social worker’s monthly premium payment is increasing from $85 a month to nearly $750.
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An analysis conducted last September by the Urban Institute and Commonwealth Fund projected the higher premiums from expiring subsidies would prompt some 4.8 million Americans to drop coverage in 2026.
But with the window to select and change plans still ongoing until January 15 in most states, the final effect on enrollment is yet to be determined.
Provost said she is holding out hope that Congress finds a way to revive the subsidies early in the year – but if not, she’ll drop herself off the insurance and keep it only for her 4-year-old daughter.
She can’t afford to pay for coverage for both of them without the subsidies.
After Republicans cut more than $1 trillion in federal healthcare and food assistance by passing Trump’s big tax and spending cuts bill, Democrats repeatedly called for the ACA subsidies to be extended.
In December, the GOP-controlled Senate rejected two partisan healthcare bills – a Democratic pitch to extend the subsidies for three more years and a Republican alternative that would instead provide Americans with health "savings accounts".
In the House, four Republicans broke with GOP leadership and joined forces with Democrats to force a vote that could come as soon as January on a three-year extension of the tax credits. But with the Senate already having rejected such a plan, it’s unclear whether it could get enough momentum to pass.
Meanwhile, Americans whose premiums are skyrocketing say lawmakers don’t understand what it’s really like to struggle to get by as health costs ratchet up with no relief.
Many say they want the subsidies restored alongside broader reforms to make health care more affordable for all Americans.
“Both Republicans and Democrats have been saying for years, oh, we need to fix it. Then do it,” said Chad Bruns, a 58-year-old Affordable Care Act enrollee in Wisconsin. “They need to get to the root cause, and no political party ever does that.”
(FRANCE 24 with AP)
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