A major shift is on the horizon for the Affordable Care Act (ACA) marketplace—and it all comes down to the potential expiration of enhanced premium tax credits introduced during the pandemic.
Originally put in place by the American Rescue Plan, these subsidies significantly lowered the cost of insurance for millions of Americans. But unless Congress steps in to extend them, they’re set to expire at the end of the year. According to the Kaiser Family Foundation (KFF), this could lead to average premium increases of up to 75% in 2025 for those who purchase insurance through the ACA marketplace.
What’s Already Happening?
Even before the subsidies expire, insurers are preparing for a bumpy road. Early filings show proposed premium hikes averaging around 15%—the largest jump since 2018—with more than a quarter of insurers requesting increases of 20% or more.
Why the spike? Insurance companies expect that, without subsidies, many younger and healthier people will simply drop their coverage. That leaves behind a riskier, sicker pool of enrollees—pushing premiums even higher in a classic case of adverse selection.
The Bigger Picture: What Happens Without Action
Marketplace Enrollment Could Plummet
If the enhanced subsidies end, the Congressional Budget Office (CBO) estimates that 4.2 million people could lose their health coverage next year. And that’s just from the subsidy expiration alone.
Factor in additional changes with the recently passed “One Big Beautiful Bill”—like stricter Medicaid requirements and new ACA market rules—and the CBO projects up to 16 million more uninsured Americans by 2034.
If Congress doesn’t act by year’s end, we’re looking at a very different—and far more volatile—health insurance landscape in 2026. Millions could lose access to affordable coverage, and both individuals and employers could be left scrambling for options.