The cost of health insurance through the Affordable Care Act (ACA) marketplaces is a persistent concern for millions of Americans. As the 2026 open enrollment period approaches, a latest analysis from the Kaiser Family Foundation (KFF) reveals a potentially significant increase in premiums for many, particularly if enhanced premium tax credits are allowed to expire. About 8 in 10 Americans who re-enrolled in Affordable Care Act marketplace coverage say they are satisfied with their plan, but affordability remains a key challenge.
Currently, enhanced premium tax credits, introduced in 2021 and extended through 2025 by the Inflation Reduction Act, are substantially lowering monthly health insurance payments for a large segment of the population. These credits both increased the amount of financial assistance available to those already eligible and extended eligibility to middle-income individuals with incomes above 400% of the federal poverty level. Without an extension, however, many enrollees face a substantial financial burden.
The Looming Expiration of Enhanced Tax Credits
The KFF report, published September 30, 2025, estimates that average premium payments would more than double if these enhanced tax credits expire at the end of this year. The analysis projects an 18% increase in gross premiums for those who would lose tax credit eligibility in 2026. For example, an individual earning $28,000 currently pays around 1% of their income – approximately $325 annually – towards a benchmark plan. If the enhanced credits lapse, that same individual could see their annual premium jump to nearly 6% of their income, or $1,562 according to KFF.
Since the ACA’s inception in 2014, the law has capped the amount subsidized enrollees pay for premiums at a percentage of their income, on a sliding scale. The federal government covers the remaining cost through tax credits. Enhanced tax credits further reduce the share of income enrollees pay. The expiration of these enhancements threatens to reverse some of the gains in coverage and affordability achieved in recent years.
Rising Premiums Over Time
The increasing cost of healthcare is a long-standing issue, and ACA marketplace premiums are no exception. Premiums for marketplace plans have risen by 75% since the ACA was first implemented. While the enhanced tax credits have helped to mitigate these increases for many, the underlying trend of rising healthcare costs continues. In 2024, the national average premium after subsidies stood at $74, a decrease from $88 the previous year, but this decrease is largely attributable to the temporary effects of the enhanced tax credits according to Healthcare.com.
Regional variations in healthcare costs also play a significant role in premium prices. Mississippi currently has the lowest average premium at $25, while other states face considerably higher costs. These differences reflect factors such as hospital prices, provider networks, and the overall health of the population in each state.
Enrollment Trends and the Impact of Subsidies
The introduction of enhanced premium tax credits has been linked to a substantial increase in enrollment in the ACA marketplaces. Enrollment has more than doubled, from approximately 11 million people to over 24 million, with the vast majority receiving enhanced tax credits. This suggests that financial assistance is a critical factor in enabling people to access and maintain health insurance coverage.
If the enhanced tax credits are not extended, many enrollees will continue to qualify for a smaller tax credit, while others will lose eligibility altogether. This could lead to a significant number of people losing coverage or being forced to choose less comprehensive plans.
What’s Next for ACA Premiums?
The future of ACA premiums hinges largely on whether Congress will act to extend the enhanced premium tax credits. Without congressional action, the credits are scheduled to expire at the end of 2025, potentially leading to substantial premium increases for millions of Americans in 2026. The debate over extending these credits is likely to be a key issue in the coming months.
Individuals and families who rely on ACA marketplace coverage should stay informed about the latest developments and explore their options during the upcoming open enrollment period. Resources are available through HealthCare.gov and state-based marketplaces to help consumers understand their eligibility for financial assistance and compare plans.
Disclaimer: This article provides general information about the Affordable Care Act and health insurance premiums. It is not intended to provide medical or financial advice. Consult with a qualified professional for personalized guidance.
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