ACA Health Insurance Premiums Set to Spike 26% in 2026 as Enhanced Tax Credits Expire
Americans relying on Affordable Care Act marketplace plans face a potential financial shock next year. Health insurers are planning an average premium increase of 26% for 2026, but the real pain could come from the scheduled expiration of enhanced premium tax credits — a change that would more than double what many enrollees pay out-of-pocket.
The looming increases stem from a perfect storm of factors. Enhanced premium subsidies that have kept costs manageable for millions are set to expire on December 31, 2025. Without congressional action to extend them, KFF estimates “currently subsidized enrollees will see their monthly premium payments more than double, increasing by about 114%, on average.”
Double Whammy: Base Rate Hikes Plus Subsidy Cuts
Insurers nationwide are proposing a median premium increase of about 18% for 2026, according to an analysis from the Peterson-KFF Health System Tracker. The requested increases vary widely, ranging from a 10% decrease to a staggering 59% increase, though most fall between 12% and 27%.
What’s driving these hikes? Industry experts point to an anticipated enrollment decline as enhanced subsidies expire. When healthier individuals drop coverage due to affordability concerns, the remaining risk pool becomes sicker and more expensive to insure — triggering a spiral of further increases.
The Centers for Medicare & Medicaid Services projects that “the average HealthCare.gov premium after tax credits is projected to be $50 per month for the lowest cost plan in 2026 for eligible enrollees. This represents a $13 increase from 2025.”
That might sound manageable, but it masks a more troubling reality. Tax credits are expected to cover about 91% of the lowest-cost plan premium in 2026, compared to 85% in 2020. The problem? Many people won’t qualify for the same level of assistance they’ve grown accustomed to.
State-Level Impact Varies
Maryland offers a glimpse of what’s coming. The state recently approved an average increase of 13.4% for ACA small group plans in 2026. State regulators noted that “this 13.4% increase was driven by the expiring federal tax credits” while advising that “consumers should carefully review their renewal notice and work with trusted advisors and the Maryland Health Connection in selecting a plan.”
Even this increase represents a win of sorts. Maryland’s approved rates came in 3.7% lower than initially requested, saving consumers an estimated $55 million annually. Other states may not fare as well.
How much could this actually cost American families? According to KFF’s interactive calculator, “Under current law, the Affordable Care Act (ACA) enhanced premium tax credit expires at the end of 2025, which will increase premium payments for Marketplace coverage by 114% on average (an estimated $1,016 a year).” That’s a substantial hit to household budgets already stretched thin by inflation.
Looking Ahead
The timing couldn’t be more politically charged, with the changes set to take effect shortly after the 2024 presidential election. Healthcare affordability consistently ranks among voters’ top concerns, and the prospect of doubling premiums for millions could become a flashpoint in congressional races.
For now, healthcare advocates are urging consumers to prepare for potential sticker shock while calling on lawmakers to extend the enhanced subsidies. Without action, the ACA marketplace — which has reached record enrollment in recent years — could see a significant contraction as affordability erodes.
The clock is ticking. As December 31, 2025 approaches, millions of Americans will be watching Congress closely, wondering if their health insurance will remain within reach or become yet another casualty of political gridlock.
