Why Obamacare Prices Could Surge for Millions Next Year

Most Americans who rely on health insurance under the Affordable Care Act — known as Obamacare — will begin signing up for 2026 coverage on Saturday. But next year, premiums could be significantly higher for millions of households.

Premium tax credits added during the pandemic have been at the center of the current government shutdown and are a key driver of expected price increases next year.

More than 24 million people are currently covered by the ACA, enacted 15 years ago to expand access to affordable health care. Analysts warn that average premiums could rise as much as 26 percent, with some families facing steeper increases as federal subsidies expire and market premiums rise.

Here’s what you need to know about what’s driving the potential hikes.

What is the Affordable Care Act?

The Affordable Care Act, introduced in March 2010 under the Obama administration, provides subsidized health insurance for Americans earning between 100% and 400% of the federal poverty level. These subsidies, known as premium tax credits, aim to reduce the cost of monthly premiums for low- and middle-income households.

The poverty threshold varies by family size, from $15,650 for an individual to $54,150 for a family of eight in 2025. Families earning less than 138 percent of the poverty level are also eligible for expanded Medicaid coverage, although 10 states, including Texas, Florida and Georgia, have not adopted this expansion.

What is causing health insurance costs to increase under the ACA?

Several factors are expected to increase ACA premiums in 2026, but the most important is the expiration of enhanced premium tax credits at the end of 2025.

These subsidies – expanded during the pandemic and then extended by Congress – have reduced costs for millions of enrollees. But with negotiations over the current government shutdown stalled, lawmakers have yet to agree on a renewal. Democrats say Republicans’ refusal to expand the credits will lead to big increases for working families, while Republicans argue the program fuels waste and fraud.

“Healthcare premiums are about to skyrocket. But Republicans have spent their entire lockdown with their heads in the sand,” Senate Democratic Leader Chuck Schumer said Thursday.

Without action from Congress, premiums could more than double, increasing by an average of 114%, according to the Kaiser Family Foundation (KFF). The group estimates that 22 million of the 24 million Americans currently enrolled in ACA plans would be affected.

Learn more: Rising health care costs are the real reason for the government shutdown

Who will be hit hardest?

If the subsidies expire, middle-income families who no longer qualify for tax credits will face the largest cost increases.

KFF projections show that a family in Virginia could see their deductibles increase from $800 to $20,000 next year. In Idaho, some households may pay $100 more per month, while a family in Maryland could have to pay $500 more per month in premiums.

For legal immigrants, premium subsidies will also end in 2026. Legal residents who are not eligible for Medicaid due to their immigration status and whose income is below 100% of the poverty level will no longer receive ACA tax credits.

Republicans say the ACA’s current provisions are too generous. House Speaker Mike Johnson argued that keeping them amounts to providing “free health care to illegal immigrants.”

Vice President JD Vance also said the tax credits fueled waste and fraud. “The tax credits are going to certain people rightfully, and we think that the tax credits are actually causing a lot of waste and fraud within the insurance industry. So we want to make sure that the tax credits are going to the people who need them,” Vance told CBS in an Oct. 12 interview.

The One Big Beautiful Bill Act, introduced by President Donald Trump and signed into law in July of this year, also made significant changes to who is eligible for the ACA, making it much more difficult for some people to sign up. Under the changes to the law, which are expected to remain in effect until 2034, KFF estimates that up to 1.7 million Americans will no longer be eligible for such coverage by 2034.

How is the Trump administration changing the ACA?

President Donald Trump’s One Big Beautiful Bill Act, signed into law in July, includes provisions that will reshape eligibility for ACA subsidies over the next decade. The administration says the reforms are intended to reduce costs and eliminate abuse, but KFF estimates that up to 1.7 million Americans could lose their ACA coverage by 2034 under the new rules.

When can Americans register?

ACA registration in most states begins November 1. People have until December 15 to sign up or change plans for coverage to begin January 1. Meanwhile, January 15 is the last day to enroll in or change Marketplace health plans for the year. After that date, people can join or change plans “only if they qualify for a special enrollment period.”