ACA premiums set to soar as enhanced subsidies expire, threatening coverage for millions
Average monthly Affordable Care Act premiums are projected to jump from about $888 to $1,904 in 2026 after enhanced federal subsidies expire at the end of this year.
Analysts warn marketplace enrollment could fall by as much as 20% to 26%, with millions expected to lose coverage entirely.
The cost of health insurance is emerging as a major new affordability crisis for American households, with Affordable Care Act marketplace premiums projected to more than double next year after Congress allowed expanded pandemic-era subsidies to expire.
Average premiums for subsidized ACA coverage are expected to rise from roughly $888 per month in 2025 to about $1,904 in 2026 — an increase of about 114% — according to analysis cited by KFF and reported by CBS News.
The sticker shock is already pushing consumers away from coverage.
Enrollment for 2026 ACA plans is down by roughly 1.2 million people so far, according to reporting by The New York Times, with insurers and policy analysts warning total enrollment could fall from about 24 million people last year to roughly 19 million this year.
Some projections suggest the decline could be even steeper.
Industry estimates cited by The Times indicate ACA marketplace participation could fall by as much as 26%, while the Congressional Budget Office previously estimated that about four million Americans could ultimately lose health insurance coverage if the enhanced tax credits disappeared.
The subsidies were originally expanded during the COVID-19 pandemic under the American Rescue Plan Act and later extended through the Inflation Reduction Act. They substantially lowered monthly premiums for middle-income consumers who previously received little or no assistance.
Without those enhanced credits, many families are now facing what consumer advocates describe as “rate shock.”
“People who thought they had finally found affordable coverage are suddenly looking at mortgage-sized insurance bills,” said one marketplace navigator quoted in recent coverage of the issue.
Middle-class consumers hit especially hard
The largest increases are expected to hit consumers who earn too much to qualify for traditional Medicaid but relied on the enhanced ACA subsidies to keep premiums manageable.
Before the pandemic-era changes, many households earning above 400% of the federal poverty level received no premium assistance at all. The temporary expansion capped benchmark premiums at a percentage of income, helping millions of middle-income Americans buy insurance.
Now those caps are disappearing.
For older Americans and self-employed workers, monthly costs in some states are expected to climb by hundreds — or even thousands — of dollars.
Health policy experts warn many consumers may respond by downgrading coverage, accepting much higher deductibles, or dropping insurance entirely.
Employer coverage also becoming more expensive
The affordability squeeze is not limited to ACA plans.
The New York Times reported that employer-sponsored coverage is also becoming more expensive as insurers pass along rising medical costs, prescription drug spending and hospital charges.
Workers are increasingly facing:
Higher payroll deductions
Larger deductibles
Narrower provider networks
Increased co-pays and coinsurance
Greater use of high-deductible health plans
According to recent employer-benefit surveys from KFF, average family premiums for employer-sponsored insurance have already climbed above $25,000 annually, with workers contributing thousands of dollars out of pocket in addition to deductibles and co-pays.
Many consumers effectively remain underinsured even when they technically have coverage.
Hospitals and insurers warn of ripple effects
Health insurers and hospital systems have warned that sharp enrollment declines could destabilize parts of the ACA marketplace by leaving a smaller and potentially sicker insurance pool behind.
If healthier consumers exit the market because of cost, insurers could respond with additional premium increases in future years.
Some insurers are also warning of growing pressure from:
Higher hospital labor costs
Expensive specialty drugs
Increased use of GLP-1 weight-loss medications
Rising behavioral health claims
Medical inflation that has outpaced general inflation in some sectors
The combination has created what analysts increasingly describe as a second wave of household inflation — one centered on healthcare rather than groceries or gasoline.
Health care poised to become election issue
With millions potentially facing higher premiums or losing insurance coverage altogether, healthcare affordability is expected to become a major political issue in the 2026 midterm elections.
Consumer advocates are urging Congress to restore or replace the enhanced subsidies before open enrollment intensifies later this year.
Without legislative action, analysts warn that many Americans could soon face difficult choices between paying for health coverage and covering other basic household expenses.
“This is kitchen-table economics,” one health-policy analyst told CBS News. “For many families, these premium increases are simply not sustainable.”