Enhanced tax credits that had reduced the cost of health insurance for many people enrolled in the Affordable Care Act expired overnight, setting up higher premium costs for millions of Americans as 2026 begins, the Associated Press reported.
The expiration affects people who buy coverage through the ACA marketplace rather than receiving it through an employer, and who do not qualify for Medicaid or Medicare. The group described by AP includes self-employed workers, small business owners, and farmers and ranchers.
The subsidy fight also played out in Washington at a time when health affordability is a top concern for voters heading into a midterm election year. Democrats forced a 43-day government shutdown over the issue, while moderate Republicans urged a solution to protect their 2026 political prospects, according to AP. President Donald Trump floated a way out but backed off after conservative backlash, the report said.
In the end, no agreement reached before the expiration date. AP said a House vote expected in January could offer another chance, but that success was far from guaranteed, particularly after the Senate rejected two partisan health care proposals in December.
The credits were first put in place in 2021 as a temporary measure to help ACA enrollees get through the COVID-19 pandemic. Democrats later extended the subsidies, moving the expiration date to the start of 2026. Under the expanded credits, some lower-income enrollees received coverage with no premiums, and higher earners paid no more than 8.5% of their income. The eligibility rules for middle-class enrollees were also expanded.
Premium increases are expected to be steep. AP reported that KFF, a health care research nonprofit, estimates the more than 20 million subsidized ACA enrollees would see their premium costs rise by 114% in 2026. AP also noted that those changes come alongside broader increases in U.S. health costs that can push up out-of-pocket costs in many plans.
For some enrollees, the change will still be a manageable adjustment. AP cited Salt Lake City freelance filmmaker and adjunct professor Stan Clawson, who said he was paying just under $350 a month for his premiums last year and that his costs will jump to nearly $500 a month in 2026. Clawson said he needs health insurance because he lives with paralysis following a spinal cord injury.
Others described much sharper increases. AP quoted 37-year-old single mother Katelin Provost, who said, “It really bothers me that the middle class has moved from a squeeze to a full suffocation, and they continue to just pile on and leave it up to us,” and added, “I’m incredibly disappointed that there hasn’t been more action.” AP said Provost’s monthly premium payment increases from $85 a month to nearly $750.
Health analysts have predicted the expiration could cause some of the roughly 24 million total ACA enrollees to forgo coverage, especially younger and healthier people. Over time, AP reported that could make the program more expensive for older, sicker patients who remain enrolled.
An analysis AP cited by the Urban Institute and Commonwealth Fund projected that expiring subsidies would prompt about 4.8 million Americans to drop coverage in 2026. The final effect on enrollment remains uncertain because many states keep the window to select and change plans open through Jan. 15, AP said.
Provost said she is holding out hope that Congress revives the subsidies early in the year, but AP reported that if it does not happen, she will drop her own coverage and keep it only for her four-year-old daughter. AP said she cannot afford to pay for both of their insurance at the current price.
The negotiations over the subsidies have stretched over months. AP reported that Republicans cut more than $1 trillion in federal health care and food assistance as part of Trump’s big tax and spending cuts bill, and that Democrats repeatedly called for the subsidies to be extended afterward. AP also said some Republicans acknowledged the issue needed addressing but did not push for a vote until late in the year.
In December, AP said the Senate rejected two health care bills: a Democratic proposal to extend the subsidies for three more years and a Republican alternative that would provide Americans with health savings accounts. In the House, AP reported that four centrist Republicans broke with GOP leadership and joined Democrats to force a vote that could come as soon as January on a three-year extension of the tax credits, but momentum in the Senate remains unclear.
AP also included the views of an ACA enrollee in Wisconsin, Chad Bruns, who said: “Both Republicans and Democrats have been saying for years, oh, we need to fix it. Then do it,” and added, “They need to get to the root cause, and no political party ever does that.”