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The enhanced premium tax credits that helped 22 million Americans afford health insurance expired on January 1, 2026. Congress failed to extend the subsidies despite a 43-day government shutdown, leaving millions facing premium increases averaging 114 percent.

The subsidies, first enacted through the American Rescue Plan Act in 2021 and extended through the Inflation Reduction Act, had transformed the ACA marketplace. Enrollment doubled from 11 million to 24 million during the subsidy period. Now, according to KFF analysis of premium impacts, the average subsidized enrollee will see annual costs jump from $888 to $1,904.

For the 92 percent of marketplace enrollees who received subsidies, the math is brutal. A Florida resident paying $900 monthly now faces premiums of $2,500. A single mother in the Midwest saw her costs rise from $85 to $750 per month.

Who Loses Coverage

The Urban Institute projects 4.8 million Americans will become uninsured in 2026, a 21 percent increase in the uninsured population. Eight states will see subsidized enrollment drop by more than half: Georgia, Louisiana, Mississippi, Oregon, South Carolina, Tennessee, Texas, and West Virginia.

Mississippi faces the steepest climb, with uninsured rates projected to jump 65 percent. The state never expanded Medicaid, leaving low-income workers with nowhere to turn when marketplace plans become unaffordable. The human toll of these coverage losses is explored further in 4.8 Million Americans Face Life Without Health Insurance as Coverage Crisis Deepens.

Workers earning between 250 and 400 percent of the federal poverty level face the harshest impact. For an individual, that means annual income between $39,125 and $62,600. This group will see average premiums spike from $1,171 to $2,455 annually.

Those earning just above 400 percent of poverty lose eligibility for any assistance entirely. The subsidy cliff returns after four years, cutting off help for approximately 900,000 Americans who had qualified under the enhanced structure.

Political Fallout

The 43-day government shutdown that began October 1 marked the longest in U.S. history, surpassing the 35-day closure in 2018-2019. Democrats withheld votes on continuing resolutions, demanding subsidy extension as the price for reopening government.

The Senate rejected a clean extension 51-48 in December, with only four Republicans crossing party lines: Susan Collins of Maine, Lisa Murkowski of Alaska, Josh Hawley of Missouri, and Dan Sullivan of Alaska.

The House took a different path. On January 8, 2026, seventeen Republicans defied Speaker Mike Johnson to pass a three-year extension by a vote of 230-196. The PBS NewsHour reported on the historic vote that saw members from swing districts break with leadership. The political dynamics behind this revolt are examined in 17 Republicans Defy Leadership: House Passes ACA Extension in Rare Revolt.

Market Instability

Insurance carriers anticipated the expiration. Rate filings for 2026 showed median increases of 18 percent, the highest since 2018. Carriers cited not only rising medical costs but the expected departure of healthier enrollees from the risk pool.

The death spiral risk is real. When healthy people drop coverage because premiums become unaffordable, the remaining pool skews sicker. Insurers raise rates to compensate. More healthy people leave. The cycle accelerates.

Ten states have implemented or expanded state-funded subsidies to cushion the blow. But state budgets cannot match federal spending that exceeded $25 billion annually.

What Happens Next

The House-passed bill now sits in the Senate, where Majority Leader John Thune has expressed resistance to a clean extension. A bipartisan working group met January 8 seeking compromise. Proposals include adding work requirements, tightening eligibility verification, and capping subsidies at different income levels.

The Congressional Budget Office estimates extending subsidies would cost $80.6 billion over ten years. Allowing expiration would increase the uninsured population by 3.8 million annually through 2034.

Open enrollment continues through January 15 in most states. Americans can still select plans, though they will pay the higher unsubsidized rates unless Congress acts.

For the 22 million who relied on enhanced subsidies, the waiting continues. The difference between a $70 monthly premium and a $700 one may determine whether they keep coverage at all.

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About the Author

Jim Toppe is the founder of Toppe Consulting, a digital marketing agency specializing in law firms. He holds a Master of Science in Management from Clemson University and teaches Business Law and Marketing at Greenville Technical College. Jim also serves as publisher and editor for South Carolina Manufacturing, a digital magazine. His unique background combines legal knowledge with digital marketing expertise to help attorneys grow their practices through compliant, results-driven strategies.

Works Cited

“ACA Marketplace Premium Payments Would More than Double on Average Next Year if Enhanced Premium Tax Credits Expire.” KFF, 30 Sept. 2025, https://www.kff.org/affordable-care-act/aca-marketplace-premium-payments-would-more-than-double-on-average-next-year-if-enhanced-premium-tax-credits-expire/.

Mascaro, Lisa and Stephen Groves. “In a rebuke of GOP leadership, House heads toward vote to extend health care subsidies.” PBS NewsHour, 8 Jan. 2026, https://www.pbs.org/newshour/politics/in-a-rebuke-of-gop-leadership-house-heads-toward-vote-to-extend-health-care-subsidies.

Related Articles

• 17 Republicans Defy Leadership: House Passes ACA Extension in Rare Revolt
• 4.8 Million Americans Face Life Without Health Insurance as Coverage Crisis Deepens

Disclaimer

This article is for informational purposes only and does not constitute legal or healthcare advice. Individuals should consult qualified professionals for guidance on their specific situations.