Millions of Americans are facing a significant increase in health costs in 2026 as subsidies under the Affordable Care Act (ACA) are set to expire on December 31. These subsidies, which were created in 2021, have helped lower monthly premiums for approximately 22 million Americans. If Congress fails to extend the tax credits, individual policyholders could experience financially devastating consequences, and healthcare costs as a whole may rise.
According to an analysis by SmartAsset, a investment adviser, monthly premiums for ACA plans would have been significantly higher in 2025 without the enhanced subsidies. For example, in Mississippi, average monthly premiums would have jumped from $41 to $605, a 1,376% increase. In West Virginia, premiums would have risen by an average of 1,058%. While the analysis is based on 2025 costs, it provides a close approximation of the potential price hikes people with ACA coverage could face in 2026 without the tax credits.
The health policy group KFF estimates that annual out-of-pocket premium costs will increase by 114% on average for the 22 million ACA enrollees who rely on the subsidies. The exact price hikes will depend on factors such as insurance plan, age, household income, health status, and location. If Congress fails to extend the tax credits, some enrollees may qualify for smaller subsidies, while others could lose eligibility entirely.
The Democratic lawmakers have pushed for an extension of the tax credits, but they lack enough support in the Republican-led Congress. Although four GOP members have signed a Democratic measure to force a vote on extending the subsidies for three years, it is unlikely that the tax credits will be extended before they expire on December 31. The Congressional Budget Office estimates that approximately 4 million people could drop their health insurance altogether, leading to higher costs for those with other types of health insurance due to increased uncompensated care.
Experts warn that the expiration of the tax credits could have severe consequences for individual policyholders and the healthcare system as a whole. As Emma Wager, a senior policy analyst at KFF, noted, hospitals may raise their prices for everyone to reconcile the increased cost of uncompensated care for those lacking coverage. The issue remains unresolved, and Congress is expected to revisit it early next year.