Healthcare premiums are about to get more expensive for millions of Americans when the Affordable Care Act (ACA) subsidies expire on Jan. 1, 2026.
Costs have increased by 26% for coverage sold through the ACA Marketplace and 30% in states that use Healthcare.gov, according to an October report from the Kaiser Family Foundation (KFF).
These percentages, however, don’t exactly reflect what the 22 million ACA enrollees with an income-based premium subsidy will pay in 2026. If the enhanced ACA tax credits expire, KFF estimated that monthly premiums will increase by an average of 114% for the subsidized ACA enrollees.
The ACA has capped health insurance premiums for subsidized policyholders since 2014. But the enhanced tax credits, introduced in 2021 and extended by the Inflation Reduction Act in 2022, help enrollees cover the cost of health insurance through income-based subsidies.
Without an extension, ACA policyholder premiums will more than double in 2026.
The uptick in health insurance costs isn’t limited to the ACA Marketplace. Even Americans with employer-based healthcare will face a 6.7% premium increase in 2026, according to Mercer’s National Survey of Employer-Sponsored Health Plans.
What’s the deal with short-term health insurance?
As health insurance becomes more unaffordable in the U.S., the Trump administration has pointed to private short-term health insurance plans as a solution, according to reporting from the Washington Post.
These plans offer a lower-cost health insurance option than ACA or standard private coverage. But they have many exclusions, including pre-existing conditions, prescription drugs, mental health services, maternity care, substance abuse treatment, adult immunizations, and more.
“These policies are a horrible idea,” Ken Swindle, an Arkansas-based attorney representing a client with a short-term policy, told the Washington Post. “People think they’re getting comprehensive medical coverage, but they’re not, and they often don’t realize that until it’s too late.”
Trump expanded the eligible length of short-term plans from four months to three years during his first term in 2018.
Short-term policies are available in 36 states, while nine states and Washington, D.C., have effectively blocked their sale through state regulations. Five states — California, Illinois, Massachusetts, New Jersey, and New York — prohibit short-term health insurance plans altogether.
What’s next? Debate continues
The expiring ACA tax credits, and whether to extend them, were a significant issue during the 43-day government shutdown that ended in November.
The spending bill that ended the shutdown ultimately didn’t include an extension of the ACA tax credits. But the conversations and proposed pieces of legislation between Congressional Democrats, who largely supported the extension, and Republicans, who largely didn’t, have continued.
As of Dec. 12, nearly a dozen Republican House members have attached themselves to opposing petitions in attempts to force a vote on the House floor to extend or reform the subsidies.
