As the deadline looms for Congress to extend the enhanced premium tax credits (PTCs) under the Affordable Care Act (ACA), millions of Americans who rely on the health insurance Marketplace are bracing for a massive financial blow. If lawmakers fail to act by the end of this year, subsidized enrollees will see their average annual premium payments more than double.
While nearly all subsidized enrollees will pay more to keep their current plans, analysis shows that the hardest-hit populations include older, middle-income Americans and low-income families, alongside small business owners and residents of rural areas.
The immediate culprit is the return of the “subsidy cliff,” which was temporarily eliminated by the enhanced tax credits. Originally, subsidies were cut off entirely for individuals earning just over 400% of the federal poverty level (FPL). When the enhanced credits expire, that cliff returns, forcing those just over the threshold to pay the full price of the benchmark premium, regardless of how high that premium is.
The impact of the expiring credits will be particularly devastating for older enrollees because their premiums are inherently higher due to age. The ACA established an age rating curve where a 64-year-old generally pays three times more than a younger adult. When the subsidy cliff returns, these high premiums suddenly fall entirely onto the consumer.
For example, a 60-year-old couple earning $85,000 (about 402% FPL) could see their yearly premium payments soar by over $22,600 in 2026. This shocking increase would cause the cost of a benchmark plan to consume about a quarter of the couple’s annual income, up from the current cap of 8.5% under the enhanced credits.
The price difference creates sharp inequities based on income alone. A 60-year-old earning $64,000 (409% FPL) would pay an estimated $14,931 annually for their premium, while a person of the same age living in the same city but making just $62,000 (396% FPL) would pay $6,175. For those caught on the wrong side of the cliff, premium payments will no longer be tied to income.
While the largest dollar increases target the middle class, the loss of subsidies fundamentally alters access for the most economically vulnerable. Enhanced tax credits currently ensure that those with incomes under 150% of FPL often pay nothing for benchmark plans.
Upon expiration, a low-income family of four with a household income of $45,000 (140% of FPL) who currently pays $0 in premium in 2025 will see their premiums rise to $1,607 a year.
Furthermore, the impact will be felt most acutely by households that have historically struggled with accessing health insurance, including Black, Hispanic, and American Indian and Alaska Native (AIAN) communities. These populations are disproportionately likely to experience “health inclusive poverty,” which means they lack the resources to meet their health and broader needs.
Sara R. Collins, Commonwealth Fund Senior Scholar and Vice President for Health Care Coverage and Access, stated that the enhanced subsidies “have been a lifeline for millions of Americans, ensuring they can get the health care they need without financial hardship. Without them, families will face skyrocketing premiums, and many will lose coverage entirely. We know that access to affordable health care is critical to people’s long-term health and financial well-being; protecting it must be a priority.”
The Marketplace has become a crucial resource for entrepreneurs and small business owners, who make up nearly 30% of all enrollees. When premiums double, many will be forced to choose between health coverage and sustaining their ventures.
The costs are tangible. Andrea Deutsch, Owner of Spot’s – The Place for Paws in Narberth, PA, shared her dilemma: “Thanks to the enhanced tax credits, I still pay over $700 a month for my health insurance, but it is manageable. Without the enhanced tax credits, I would be paying approximately $1,400 per month for my same plan. The cost of the plan goes up every year, so it may even be more next year. Keep in mind, this plan is not for the care of an entire family. It is simply to cover a single individual – me. This would be incredibly burdensome for me as a small business owner to sustain and would be increasingly difficult as costs rise.”
The burden is compounded geographically. Because benchmark premiums are often significantly higher in rural areas than in urban areas, residents in high-premium regions will be hardest hit by the loss of subsidies. In fact, 34 states have higher average benchmark premiums in rural areas.
The enhanced credits provided particularly large benefits to rural residents, and some projections indicate that if the credits expire, most rural states could see a 30% decrease in Marketplace coverage and a 37% increase in uninsured populations.
The human cost is measured not only in lost coverage but also in macroeconomic instability. If the subsidies expire, an estimated 4.8 million people will become uninsured in 2026, leading to a dramatic increase in uncompensated care. Hospitals, physicians, and other providers face over $32.1 billion in lost revenue, and uncompensated care will spike by $7.7 billion nationwide.
The overall economy is projected to suffer losses of $34 billion in gross domestic product (GDP) and 286,000 job losses, nearly half of which are expected in the healthcare sector.
Leighton Ku, Director of the Center for Health Policy Research at GWU’s Milken Institute School of Public Health, warned that the consequences extend far beyond premium notices: “Eliminating federal premium tax credits will have serious economic repercussions nationwide. States will face deep job losses, particularly in health care, along with billions in lost economic activity. Without these subsidies, families will struggle to afford coverage, businesses will take a hit, and state and local budgets will be stretched even thinner. The ripple effects will be felt in every community.”
If Congress fails to secure an extension, the marketplaces—which have seen enrollment more than double to over 24 million people since the enhanced subsidies were introduced—will be destabilized. The loss of enhanced subsidies would likely push healthier, younger enrollees (aged 18-34) out of the market first, worsening the risk pool and driving premiums higher for everyone remaining, including those who are not subsidized.
As Selena Simmons-Duffin of NPR noted, “I mean, these marketplaces are already the option of last resort for people that – who don’t get insurance through their work, so millions are projected to go uninsured if they can’t afford their premiums.”