US ACA Marketplace Premiums Surge 26% as Enhanced Subsidies Expire, Millions Expected to Drop Coverage

The expiration of enhanced premium tax credits at the end of 2025 has triggered one of the most significant affordability shocks in the Affordable Care Act (ACA) marketplace's history. The enhanced subsidies, originally introduced by the American Rescue Plan Act in 2021 and extended through 2025 by the Inflation Reduction Act, had driven ACA enrollment to record highs by capping how much subsidized enrollees paid for premiums.

With those enhancements gone, gross ACA marketplace premiums rose by an average of 26% for 2026, according to KFF — with increases of approximately 30% in states using the federal Healthcare.gov platform and 17% in states running their own marketplaces. But for the roughly 22 million Americans who had received enhanced subsidies, the impact on out-of-pocket costs is far more severe: net premium payments more than doubled, rising 114% on average from $888 to $1,904 annually, per KFF estimates.

The consequences are already visible. Wakely Consulting Group data showed that only about 86% of January 2026 enrollees paid their first month's premium, and KFF estimates effectuated enrollment in the individual market could decline by around 21.5%, potentially dropping to 17.5 million — closely aligned with Congressional Budget Office projections of a roughly 25% marketplace contraction. The Urban Institute and Commonwealth Fund estimate 7.3 million people will leave the marketplace in 2026, with about 5 million becoming uninsured. Young adults aged 19-34 account for nearly half of the anticipated increase in the uninsured.

Insurers attributed about 4 percentage points of the 26% premium increase to expectations that healthier people would drop coverage if the subsidies lapsed, with the remainder driven by rising healthcare costs including new specialty drugs, labor costs, and provider consolidation. Economists warn of a potential 'death spiral': if young, healthy enrollees exit the risk pool, the remaining population becomes older and sicker, prompting further premium increases in a self-reinforcing cycle. Congressional efforts to extend the subsidies have stalled, with a House-passed three-year extension facing resistance in the Senate, where Republicans seek additional enrollment restrictions.