Enhanced Affordable Care Act premium tax credits (PTCs) are set to expire at the end of 2025, and without congressional action, millions of Americans face sharply higher health insurance premiums and potential coverage loss, with significant consequences for household and federal budgets, according to stakeholders.
Millions of Americans who purchase health insurance through the Affordable Care Act (ACA) marketplace face steep premium increases in 2026 as the enhanced PTCs are set to expire. The enhancements, which were enacted as part of the American Rescue Plan Act (ARPA) and later extended through 2025 by the Inflation Reduction Act (IRA), will end unless Congress intervenes.
Background
The PTC is a refundable tax credit designed to help eligible individuals and families afford health insurance purchased through the ACA marketplace. As explained in a Congressional Research Service (CRS) report, which was initially published earlier this year and last updated in September, the credit works by capping the amount a household is expected to contribute toward a “benchmark” silver-level health plan, with the government subsidy covering the rest.
Prior to 2021, eligibility was limited to households with incomes between 100% and 400% of the federal poverty level (FPL), creating a “subsidy cliff” where a small income increase could make a family entirely ineligible for assistance. The ARPA and IRA enhancements temporarily eliminated this cliff by extending eligibility to those with incomes above 400% of the FPL and made the subsidies more generous overall.
These changes fueled record marketplace enrollment, which, according to a February 2025 explainer from the Commonwealth Fund, grew from 12 million people in 2021 to a record 24.2 million in 2025.
Rising Costs, Coverage Losses
If the enhancements expire, premiums for marketplace enrollees will rise sharply. A report published October 29 by Gideon Lukens and Elizabeth Zhang at the Center on Budget and Policy Priorities (CBPP) projects that the amount the average enrollee pays will more than double. For example, a family of four making $130,000 (about 404% of the FPL) would see their monthly premium jump from $921 to $1,998 — an annual increase of about $12,900.
This “rate shock” is expected to push millions out of the insurance market. Projections on the number of people who would become uninsured vary slightly, though they all point to a significant increase. The Congressional Budget Office (CBO), in a June 2024 letter from Director Phillip Swagel to House Republican leaders, estimated that the number of uninsured people would rise by 3.8 million, on average, in each year over the 2026-2034 period.
Subsequent analyses showed a growing consensus around that number. The Commonwealth Fund’s Senior Scholar Sara Collins and Program Assistant Carson Richards projected that 4 million people would likely become uninsured. The Economic Security Project forecasted that 4.2 million people will lose coverage.
An analysis from the Urban Institute, authored in September by Senior Fellow Fredric Blavin and Principal Research Associate Michael Simpson, projects an even larger impact, with 4.8 million more adults becoming uninsured in 2026. The authors note this figure is larger than prior-year estimates partly because marketplace enrollment in 2025 was substantially higher than expected.
Representative Ilhan Omar (D-MN) said at an October 29 “Save the ACA” rally organized by the Economic Security Project that the “enhanced ACA tax credits made health insurance more affordable for families and more than 89,000 Minnesotans. Their loss would mean skyrocketing premiums,” she said. “This will hit middle-class Americans, small business owners, farmers and people [aged] 55 and older, the hardest.”
Budget Forecast
Swagel had found that making the enhanced PTC permanent would increase the federal budget deficit by an estimated $335 billion over the 2025-2034 period. This net cost reflects a complex shift in coverage, including a projected 3.5 million decrease in employment-based coverage as some workers switch to more affordable marketplace options, he wrote last June.
The Urban Institute’s more current analysis highlights that allowing the credits to expire would create other economic pressures, even while avoiding direct federal spending. The report projects that the resulting increase in the uninsured population would lead to a $7.7 billion increase in the demand for uncompensated care in 2026.
This cost, the report claims, is not a federal budget line item but is instead absorbed by hospitals, physicians, and state and local governments, placing a financial strain on the broader health care system.
At last Wednesday’s rally, Jennifer Flynn Walker, co-director of campaigns for Popular Democracy in Action, told attendees outside the Capitol building, “Families are struggling to pay rent and keep their health care while [President Trump] demolishes the East Wing to build a $300 million ballroom for his billionaire friends, instead of reopening the government and fixing the health care crisis affecting millions of us.”
For more on the premium tax credit, see Checkpoint’s Federal Tax Coordinator 2d ¶ A-4240.
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