5 Points on the Impact of Congress Letting ACA Subsidies Expire

Last fall, we experienced the longest government shutdown in U.S. history. For 43 days, Democrats on Capitol Hill pushed for the extension of expiring credits under the Affordable Care Act, warning that failure to do so would cause health care costs for millions of Americans to skyrocket. Congressional Republicans held firm, a handful of Senate Democrats ultimately broke with their party to vote to reopen the government, and the shutdown ended on November 12.

If the discussions resumed after the holidays, they were interrupted without fanfare. The ACA’s enhanced premium tax credits have been eliminated. These credits, created as part of the pandemic American Rescue Plan Act of 2021, have significantly reduced monthly premiums – sometimes down to $0 – for 22 million Americans. People with incomes between 100% and 400% of the federal poverty level ($32,150 for a family of four in 2025) have had their monthly premiums reduced. After the implementation of the enhanced credits, enrollment in ACA marketplace plans doubled, increasing by more than 12 million new enrollees.

With their elimination, many of the dire warnings from health care experts have come to fruition. One million fewer Americans are enrolled in ACA marketplace plans, and that number is expected to continue to rise. Ethnic and racial minorities, children and other vulnerable communities are disproportionately affected. And the disparate plans proposed by President Trump and the Republican Party would provide individuals with one-time lump sums that wouldn’t even cover the cost of an emergency visit — not exactly a substitute for real health insurance coverage.

Below, we take a close look at the health care landscape now that the subsidies are gone, and consider how frustration over soaring health care costs will impact the 2026 midterm elections.

Subsidies are a priority for voters, even if they are not for members of Congress

During the 43-day government shutdown last fall, Republican leaders said they were willing to extend the subsidies, but only after the shutdown ended. After the shutdown, the Republican-controlled Senate rejected one of those bills, and Republicans shifted their focus to alternatives to the ACA.

In January, a bill to extend the grants through 2028 passed the House and has since been placed on the Senate calendar. But efforts to expand the subsidies — which attracted some Republican support in the House — have now largely “fizzled,” according to Jennifer Snow, national director of government relations and policy at the National Alliance on Mental Illness (or NAMI), which has stepped up its advocacy efforts on Capitol Hill.

Inaction on expiring subsidies, and health care in general, is shaping up to be a critical issue in the 2026 midterms. An October KFF poll found that 78% of adults and 59% of Republicans wanted the subsidies extended. Some of the groups facing the greatest financial shock from monthly premium increases are key members of the Republican base, including seniors and rural Americans. Analyzes from the Bipartisan Policy Center and the State Marketplace Network estimate that some seniors will now spend between 25% and 30% of their annual income on premiums.

At least 1 million fewer people are no longer insured through the ACA marketplace

Premiums have now increased by an average of 114% – in many cases, hundreds of dollars per year – for policyholders. As a result, enrollment in ACA Marketplace plans declined by more than 1 million people in 2026, but experts predict that number will only increase as enrollees struggle to pay their premiums. Faced with choosing between insurance coverage and other basic necessities, many may abandon their plans later in the year.

“What we’re seeing so far in the early numbers is probably just the tip of an iceberg,” said Paul Jacobs, director of modeling at the Johns Hopkins Center for Health Systems and Policy Modeling. “The question is: How big is the iceberg and how fast is it moving?

Rising premiums aren’t the only new barrier to coverage: The Budget Reconciliation Act of 2025, also known as the One Big Beautiful Bill Act or OBBBA, added several new requirements for enrollees, ended auto-renewal (which was responsible for enrolling 10 million people in 2024), and shortened enrollment periods. Taken together, these additional barriers may contribute to an increasing number of people failing to maintain their enrollments from year to year. New proposals from the Centers for Medicare & Medicaid Services and the Department of Health and Human Services for 2027 and beyond aim to make premiums as cheap as possible — at the expense of meaningful coverage. The rising costs of silver and gold plans, which have lower deductibles but higher monthly premiums, could push more people into risky, high-deductible and catastrophic plans with “virtually no coverage,” according to NAMI’s Jennifer Snow.

Republican-proposed replacement for ACA could leave major gaps for most enrollees

Trump and other Republican leaders have touted tax-advantaged health savings accounts, or HSAs, as the ultimate replacement for the ACA. The OBBBA expanded HSAs as an alternative to ACA coverage. In November’s Truth Social articles, Trump outlined his populist vision that subsidies would go directly to consumers, rather than to insurance companies in the ACA marketplace. (The Kaiser Family Foundation noted that ACA subsidies are already paid to enrollees or are passed through to insurance companies on that enrollee’s behalf).

Trump further emphasized this vision in his “Big Health Plan,” announced in January, which purports to end the ACA subsidy “scam” and “put extra money directly into the health savings account in your name, and you’ll buy your own health care, and you’ll do a lot of business, you’ll get better health care for less money.” » Republican representatives introduced a handful of bills in late 2025 and early 2026 that would also expand the use of HSAs (sometimes called “Trump Health Freedom Accounts”) in the ACA marketplace.

But redirecting the equivalent monetary value of a given subsidy to an individual “is really not the same thing as providing health coverage,” Elizabeth Fowler, also a researcher at the Johns Hopkins Bloomberg School of Public Health, said at a press briefing in January. While an HSA may be enough for some people, an annual reimbursement of $1,000 to $5,000 “will not be enough to cover the cost of care” for people with more complex health needs, such as cancer treatment, routine surgeries or chronic health conditions.

And for any individual, “a trip to the emergency room could exceed the amount provided,” Fowler said.

Minority groups likely to be hardest hit by loss of coverage

The loss of enhanced tax credits will not be felt uniformly. In a recent study, Jacobs found that COVID-era subsidies led to significant gains in enrollment, particularly for historically disenfranchised and economically vulnerable groups — racial and ethnic minorities, children, part-time workers, and middle-class families. He now fears these are the people most at risk of losing their coverage. “We’ve essentially rebuilt affordability barriers that, before the ACA and before ARPA’s enhanced credits, kept millions of people uninsured,” he said. “I’m really afraid that we’re going back to something more unequal. »

In fact, Jacobs found that the enhanced premium tax credits leveled the playing field. “A black American eligible for marketplace coverage had about a one-in-10 chance of being enrolled, while a white American had about a one-in-four chance,” he said of the days before the enhanced tax credits. “Once these grants were available, the two groups had a roughly equal percentage. »

“This is not really a marginal improvement, but a structural change in access to the health insurance system.”

Downstream costs can exceed short-term savings

Conservative think tanks have cited the $335 billion cost over 10 years of the enhanced premium tax credits on the federal deficit as too costly to the American taxpayer to extend. But the loss of subsidies will also have several unintended consequences for the struggling U.S. health care sector.

“I think the math is simple,” Jacobs said. “You know, millions of people are at risk of losing market coverage. They keep getting sick.”

“What is the cumulative effect of delaying treatment for your mental health problem? » Snow told NAMI. “In general, this means things are getting worse and you’re more likely to need more intensive and expensive services once you reach a breaking point.”

Rural and safety-net hospitals are likely to bear the brunt of these costs, while the uninsured wait until preventable problems become emergencies. Most U.S. hospitals are required by law to provide emergency care, regardless of the patient’s ability to pay. As patients take on more medical debt without adequate insurance, the hospitals that treat them also earn less revenue.

More than 1,000 rural hospitals are currently at risk of closing, according to the Commonwealth Fund, a private foundation that promotes health care equity. The Fund estimates that the expiration of the tax credits will ultimately result in a loss of $1.6 billion in uncompensated care and revenue for rural hospitals. Although Rural Health Transformation Program funds will provide some of these hospitals with an infusion of cash, they will not be able to offset the costs of coverage reductions because no more than 15 percent of a state’s total funds awarded can be used for direct provider payments.

Lower enrollment and fewer patients could have other large-scale economic impacts. The Commonwealth Fund conservatively estimates that the expiration of the enhanced credits will result in a $40.7 billion reduction in state economies and a loss of nearly 340,000 jobs across multiple sectors, far exceeding what would have been spent to extend the credits.